Mattel Inc. Barbie brand dolls are displayed on the market at a Walmart Inc. store in Burbank, California, U.S., on Tuesday, Nov. 26, 2019. A PWC survey shows that 36% of consumers surveyed plan to buy on Black Friday. Deals will ultimately dictate where spending and visits go.
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Toymaker Mattel has agreed to pay a $3.5 million advantageous to settle charges related to misstatements in two quarters of earnings in 2017, the Securities and Exchange Commission announced Friday.
The SEC said Mattel “violated quite a few skilled standards” by understating its tax-related valuation for the third quarter of 2017 by $109 million. The corporate then overstated its tax expense within the fourth quarter of that yr by the identical amount, in keeping with the SEC’s order.
Because of this, the corporate misreported its quarterly losses.
The advantageous is said to a SEC probe that led to 2019. Mattel’s $109 million tax expense error went uncorrected until its November 2019 restatement.
Mattel’s chief financial officer announced he would step down that yr.
The SEC said Mattel didn’t admit or deny the findings of its probe.
The commission is individually pursuing enforcement motion against a former auditor at PricewaterhouseCoopers, a global tax consulting firm, who oversaw the work.
“An auditor’s adherence to skilled standards and independence is critical to preserving investors’ trust in an organization’s financial statements,” Alka Patel, associate director of the SEC’s Los Angeles Regional Office, said in an announcement. “Auditors who advise their clients on who to rent could have an interest within the success of such hires and will due to this fact be less critical of their effectiveness, all of which undermines the auditor’s independence.”
Joshua Abrahams, who’s identified within the report because the PwC auditor involved, knew concerning the error but did not share it with Mattel’s audit committee, the SEC found. Abrahams also provided restricted human resource advice to Mattel, it said.
“We’re pleased to have the matter behind us. While we’re not going to comment on the underlying facts, we appreciate the SEC’s recognition of the corporate’s remedial measures,” a Mattel company spokesperson said Friday.
The SEC said it’s going to hold a public hearing on Abrahams’ actions.
