- This was announced by the Securities and Exchange Commission Mattel Inc MAT has agreed to pay $3.5 million for the settlement fees regarding misstatements in its financial reports for the third and fourth quarters of 2017.
- Pursuant to the SEC order, the toymaker understated its Q3 FY17 tax allowance by $109 million and overstated its Q4 FY17 tax expense by the same amount.
- As a result, Mattel’s Q3 and Q4 FY17 net loss and net loss per share were understated by 15% and overstated by 63%, respectively.
- In addition, the SEC’s order noted that Mattel at the time did not have internal control specifically related to the calculation of an allowance.
- Until Mattel corrected it in November 2019, the $109 million tax expense error remained uncorrected and the lack of internal control over financial reporting related to the error was not disclosed.
- Neither the CEO nor Mattel’s audit committee were notified of the $109 million error.
- Without admitting or denying these findings, Mattel agreed to a cease and desist order and to pay a $3.5 million civil penalty.
- Separately, the SEC has initiated litigation against Joshua Abrahams, a former auditing partner at PricewaterhouseCoopers LLP or PwC, to determine whether he engaged in improper professional conduct and violated the auditor’s independence rules.
- The order against Abrahams alleges that he violated numerous professional standards during Mattel’s fiscal 2017 third-quarter interim review and 2017 annual audit.
- The order further alleged that Abrahams had failed to uphold independence by providing prohibited personnel consulting to Mattel.
- also read: VeeFriends Land’s Partnership with Macy’s and Toys “R” Us: How to Get Physical NFT Collectibles
- Price promotion: MAT shares are trading down 0.15% at $19.79 on the last check Monday premarket.
- Photo via company
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