Disney Inflated Revenue For Years According To Whistleblower

Credit: Benoit Tessier/Reuters

A former employee has blown the whistle on Disney’s finances.

A whistleblower has approached the Securities and Exchange Commission (SEC) with complaints that the Walt Disney Company has been inflating its revenue for years.

The whistleblower, a former senior financial analyst who worked at Disney for 18 years, alleges that revenues were systematically overstated by billions of dollars. The former analyst, Sandra Kuba, explains that the company was allegedly able to exploit weaknesses in the company’s accounting software. Kuba alleges that this was done by employees at the parks-and-resorts business segment of the company. The SEC has so far declined to comment, but Kuba claims to have met with SEC officials on several occasions.

Kuba’s allegations describe a well-thought out operation to inflate revenues. Among the allegations, Kuba claims that employees boosted revenue by recording false revenues from activities like free guest promotions and complimentary golf rounds. Another allegation would see employees falsely report revenue from gift cards that exceeds the actual price that customers paid for them. They also allegedly recorded gift card sales twice on top of inflating the cost of the cards. These issues are highly significant as well, as Kuba alleges that the company could have overstated its revenue by $6 billion in 2008-2009 alone.

Disney, for its part, denies all of these claims. A spokesperson for the company has said that Disney has reviewed all of Kuba’s claims and found that they’re “utterly without merit.”

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5 years ago