Toy company Mattel announced in a regulatory filing Tuesday it has received a subpoena from the Securities and Exchange Commission seeking documents related to a previously disclosed investigation that had uncovered accounting errors.
In August 2019, Mattel received an anonymous whistleblower letter concerning allegations over accounting errors. Following receipt of that letter, Mattel’s audit committee launched an independent investigation into the allegations.
“The investigation determined that income tax expense was understated by $109 million in the third quarter of 2017 and overstated by $109 million in the fourth quarter of 2017,” Mattel announced in October. The investigation also uncovered material weaknesses in its internal controls over financial reporting (ICFR).
Following that independent investigation, Mattel filed an amended annual report for the year ended Dec. 31, 2018, to restate its unaudited quarterly financial data for the three-month periods ended Sept. 30, 2017, and Dec. 31, 2017; and to restate its managements report on ICFR. “The restated consolidated financial statements and financial information also reflected revisions for other immaterial misstatements,” Mattel said in its regulatory filing.
In Tuesday’s regulatory filing, Mattel said it received a subpoena from the SEC in December “seeking documents related to the whistleblower letter and subsequent investigation.” Mattel said it’s now responding to that subpoena.