Ex-Disney accountant alleges major accounting fraud in parks and resorts division

[Dead2009]

What the frell is going ON here?

Panic and mass hysteria

 

[Magenta Panther]

Panic and mass hysteria

Dogs and cats living together...

 

[Sir_Cliff]

View attachment 399736

In case anyone was wondering what grudge sparked yesterday's controversy...

 

[Thelazer]

The gift card stuff, is not un-realistic. I know of a few games that have been played with gift cards at the major parks in Orlando.
Also the "Disney Dollars" oh man, I have story's about that, that could easily add up.. maybe not billions, but millions.. yes.

 

[DAR1974]

I could easily be put on ignore.

Ok

 

[RSoxNo1]

Those were pre Sox though....

Things have tightened immensely...

Don't drag the Red Sox into this, they've suffered enough this year already.

 

[Horizons '83]

Could anything that Disney gives away free be classed as income ? Intra-company profit and loss ? Sale of free Dining plan food in Resort Restaurant Income versus cost of dining plan added to the Disney Resort advertising freebies expense total ? An extra day free at the park could be classed at full retail day's rate sale with the same amount as a cost to ticketing overheads.
What are the financial rules against such a thing ?

That’s kind of above my comprehension of accounting rules. I was mainly on the financial side of the house but all of that could be in play for sure.

 

[DisneyCane]

From MarketWatch:

A former Walt Disney Co. accountant says she has filed a series of whistleblower tips with the Securities and Exchange Commission alleging the company has materially overstated revenue for years.

Sandra Kuba, formerly a senior financial analyst in Disney’s revenue-operations department who worked for the company for 18 years, alleges that employees working in the parks-and-resorts business segment systematically overstated revenue by billions of dollars by exploiting weaknesses in the company’s accounting software.

Kuba said she has met with officials from the SEC on several occasions to discuss the allegations.

Can't see how Chapek and Iger survive this one.

They can survive if it isn't true. Every accusation by a whistleblower isn't automatically true. The SEC should and will investigate but at this point Disney is innocent until proven guilty.

 

[Nubs70]

Wonder if there could be some FCPA violations regarding Shanghai?

 

[thomas998]

As an investor, I hope it's not true.

These things are typically a lot more complex than on the surface. I'd take what an ex-employee with a potential vendetta with a grain of salt until we get some real facts.

A lot of allegations can be made, but few probably have the entire picture. With the price increases of the last decade, Parks and Resorts seem the least likely candidate for fraud. The revenues seem to make sense at a high level.

Frankly ex-employees are probably not going to make accusations without some real evidence because they know the company would come after them like stink on pooh if they make stuff up.

My only real question is what benefit do you get out of inflating revenue? Inflating income I can understand, but if you don't inflate income than inflating revenue only makes your business look like it is poorly run as the profit margins would be horrible if your only inflating revenue.

 

[HmmmmmMMMmm]

Frankly ex-employees are probably not going to make accusations without some real evidence because they know the company would come after them like stink on pooh if they make stuff up.

Employees are until NDAs for five years after their last day working for the company. They're not going to make something up on this magnitude and go to the press with it without having ironclad evidence.

 

[Sir_Cliff]

Frankly ex-employees are probably not going to make accusations without some real evidence because they know the company would come after them like stink on pooh if they make stuff up.

My only real question is what benefit do you get out of inflating revenue? Inflating income I can understand, but if you don't inflate income than inflating revenue only makes your business look like it is poorly run as the profit margins would be horrible if your only inflating revenue.

I was wondering this too. What exactly was the end game here?
I'm also curious as to on what level this was supposed to be happening. If we're talking about billions of dollars, presumably this was some kind of mandate from Burbank. That seems like a freakishly risky (as well as illegal) thing for a company like Disney to be engaging in. If some mid and lower-level managers were doing this to make themselves look good to their bosses, that would be more believable. If income is thrown into the mix, that is. But then, the scale alleged here suggests that it is division-wide.

 

[marni1971]

I just woke up.

Not again....

 

[Stripes]

I just woke up.

Not again....

I think I need a break. My head hurts.

 

[pheneix]

I just woke up.

Not again....

I’m expecting skeletons to come out of closets every day this week tbh

 

[Ojo4]

So what plot twist should we expect tomorrow? I'm fully expecting an advent calendar of drama until D23

 

[Tux]

 

[LSLS]

Frankly ex-employees are probably not going to make accusations without some real evidence because they know the company would come after them like stink on pooh if they make stuff up.

My only real question is what benefit do you get out of inflating revenue? Inflating income I can understand, but if you don't inflate income than inflating revenue only makes your business look like it is poorly run as the profit margins would be horrible if your only inflating revenue.

Well if you raise revenue and didnt raise expenditures, your profit would inflate as well.

 

[Kamikaze]

Employees are until NDAs for five years after their last day working for the company. They're not going to make something up on this magnitude and go to the press with it without having ironclad evidence.

Depends on the CMs role (TWDC does not have employees) and even then, the NDA does not cover violations of the law, or certain aspects of the roles. NDAs and non-competes have also been found to be largely unenforceable in the legal realm. They can certainly punish the person in other ways if they break it, but you can't have an NDA that stops a person from going to law enforcement.

 

[danv3]

Frankly ex-employees are probably not going to make accusations without some real evidence because they know the company would come after them like stink on pooh if they make stuff up.

LOL no. Ex-employees who were fired “for cause” are the most likely to make something like this up. And there’s almost nothing the company can do to “come after them” for making a complaint to a government agency.

Of course I know nothing about the particulars of this case. Maybe there something there. But I do know to take claims like this with a big helping of salt.