Toymaker Mattel agrees to pay $3.5 million in fines over financial discrepancies
Mattel
Global toymaker giant Mattel on Friday entered into an agreement withUS Securities and Exchange Commission (SEC) to pay$3.5 million in fines to settle a 2017 case over financial misstatements.
“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 company’s remedial measures,” said Mattel's spokesperson after the announcement.
According to the SEC, the California-based toymaker had reported incorrect losses during Q3 and Q4 of 2017. The incorrect losses were reported due to tax reporting errors which according to the financial regulator, 'went uncorrected' till November 2019.
The company which makesBarbie, Hotwheels andFisher-Price toys among others 'violated numerous professional standards' by understating its tax valuation by as much as $109 million fir two consecutive quarters.
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Joshua Abrahams, the auditor tasked with keeping a close look on the account books of the toy company will be reportedly tried in a public hearing to determine if he violatedauditor independence rules.
“An auditor’s adherence to professional standards and independence is critical to preserving investors’ trust in a company’s financial statements,” saidAlka Patel, associate director of the SEC’s Los Angeles Regional Office.
“Auditors who advise their clients on who to hire will have an interest in the success of such hires and could therefore be less critical of their effectiveness, all of which undermines the auditor’s independence,” she added.
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Mattel has refused to divulge any further details about the case, having already agreed to pay the fines. However, the company;s shares fell more than one oer cent on the stock market during Friday's trading session.
(With inputs from agencies)
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