In its annual 10-K filing, Mattel Inc. recently revealed that it received a subpoena from the U.S. Securities and Exchange Commission (SEC) regarding a whistleblower letter the toymaker received last August.
The company’s auditor received an anonymous letter, which alleged accounting errors. The auditor sent the letter onto Mattel. An internal investigation found violations of SEC rules. First, the lead audit partner of the external auditor hid from the company that it understated its income tax expenses by $109 million in 2017’s third quarter while overstating it by a similar amount in the fourth quarter. However, there was no impact on full-year results since they were non-cash errors. The investigation also found that the outside auditor made recommendations to Mattel for hiring decisions of senior financial positions.
Read more:
Reuters: Mattel receives SEC subpoena on whistleblower letter
The Motley Fool: Mattel Reveals SEC Subpoena Over Whistleblower Investigation
Image courtesy of Gage Skidmore