According to MarketWatch, a former accountant of the Walt Disney Co. has said she has filed a series of whistleblower tips with the Securities and Exchange Commission. Sandra Kuba, formerly a senior financial analyst, alleges that the company has inflated it’s revenue for years.
Sandra Kuba, who worked in the revenue-operations department and 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.
A spokeswoman for the SEC declined to comment, but Kuba has said she met with officials from the SEC on several occasions to discuss the allegations.
A Disney spokesperson said the company had reviewed the whistleblower’s claims and found that they were “utterly without merit.”
MarketWatch reports that: Kuba’s whistleblower filings, which have been reviewed by MarketWatch, outline several ways employees allegedly boosted revenue, including recording fictitious revenue for complimentary golf rounds or for free guest promotions. Another alleged action Kuba described in her SEC filing involved recording revenue for $500 gift cards at their face value even when guests paid a discounted rate of $395.
Other allegations from Kuba are that employees sometimes recorded revenue twice for gift cards, both when guests bought the gift card and when it was used at a resort, and that revenue was recorded even though a gift card was given to a guest for free following a customer complaint.
Kuba’s whistleblower filing alleges that in just one financial year, 2008-09, Disney’s annual revenue could have been overstated by as much as $6 billion. The parks-and-resorts business segment reported total revenue of $10.6 billion in 2009, according to its annual report filed with the SEC.
Kuba told MarketWatch she first reported the alleged revenue-recognition issues to management in 2013, and claims that no one responded to her at that time. She stated that she escalated her concerns to a more senior executive in 2016 and that Disney’s corporate audit group contacted her once in November 2016 but never followed up.
The employee stated that she brought her concerns to the SEC in August 2017. Kuba also said she was fired from Disney about a month later.
The Disney spokesperson said: “The claims presented to us by this former employee — who was terminated for cause in 2017 — have been thoroughly reviewed by the company and found to be utterly without merit; in fact, in 2018 she withdrew the claim she had filed challenging her termination. We’re not going to dignify her unsubstantiated assertions with further comment.”
Kuba withdrew her claim challenging the termination but, but says she reserves the right to resubmit it and continues to dispute Disney’s decision to fire her.
You can find more information on Kuba’s story on MarketWatch.com.
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