Add yet another name to the growing list of US companies come under scrutiny for questionable accounting methods - Omnicom.

The advertising and communications powerhouse has been gobbling up smaller rival firms in recent years.

But it is the way it accounted for the purchases that caused one of its board members to resign in protest last month, the Wall Street Journal reported on Wednesday.

The slightest scent of yet another inquiry into how a company keeps it books was enough to cause Omnicom shares to plummet 20% on Wednesday.

In order to stem the losses, Omnicom's board issued a statement, saying it "disagreed" with the Journal's assessment that the firm's accounting methods had caused controversy among board members.

Omnicom developed Bud-weiser's 'Whassup' ads

"We fully support the company's strategy, and are confident in its operating results, accounting practices and financial disclosures," board members said.

Analyst downgrades

In addition, the firm's chief executive, John Wren, vowed to increase investor confidence by making the firm's transactions more transparent.

"We thought up until this moment that we were doing it right, but obviously not right enough to withstand the panic created by this article," Mr Wren said.

"Obviously, we've got to do more."

Despite the reassurances, analysts on Thursday downgraded the stock.

Analyst William Warmington at SunTrust Robinson Humphrey cut his rating on Omnicom to "neutral" from "outperform".

He said the stock had been selling 20-30% above other media companies based on investor confidence in Omnicom management.

"Until they can regain that credibility on the issues raised in the Journal, they'll probably trade in-line with the group," Mr Humphrey said.

Share-price tumble

Meanwhile, UBS Warburg reduced its price target on the stock to $82 from $100 a share.

But even as it reduced its target, UBS Warburg said Omnicom remained on its "buy" list and believed the stock was undervalued.

"We believe that the company has the best portfolio of assets in the [advertising] agency space," analyst Catherine Kim wrote in a research note.

But the whiff of scandal pushed Omnicom shares lower in midday Thursday trading on Wall Street, where its shares trade on the New York Stock Exchange (NYSE).

After falling to nearly as low as $50 a share, Omnicom rebounded a bit to $55, off nearly 12% from its close of $62 on Wednesday.

Omnicom is one of the world's largest advertising-holding companies. Its agencies include BBCO Worldwide and DDB Worldwide.

It is responsible for such memorable adverts as "Whassup" for beer-brand Budweiser and Pepsi's "The Joy of Cola" in the US.