COMPANY’S INDUSTRIES?
•Entertainment
•Broadcasting
•Movie Production
•Travel & Tourism
•Hotel & Resort
•Theme Park
•Publishing
•Consumer Products
•Music and Sports
PRIMARY PRODUCTS?
-Movies
(or)
-Animated Cartoons
-Licensed Products
SERVICES?
-Books & Magazines
-Music Recordings
-Rides
-Scenic Attractions
-Hotel Services
-Travel & Tourism Services
-Child Care Services
-Environmental Programs
-Charitable Programs
-Volunteer Programs
-Cable Network Channels
-T.V Station
-Radio & T.V. Broadcasting
-Restaurants
-Sports Complex
-Theatrical Productions
RAW MATERIALS?
•Various Synthetic Materials
•Wood
•Steel
•Iron
•Cotton
•An Infinite Number of Other Things
HOW
LARGE
IS DISNEY?
Consolidated Revenues: $22,473,000,000
Total Combined Assets: $37,776,000,000
Total Number of Employees: A Lot !
Company Location?
500 South Buena Vista Street
Burbank, CA 91521
The Walt Disney Company is a financially strong company for the
following reasons:
-If the company were to liquidate right now it would be able
to satisfy all of its obligations.
-Highly diversified
-Demonstrates a continuous pattern in earnings and growth.
-Company is properly leveraged.
-Management’s commitment towards shareholder returns.
Earnings Per Share
International Revenues
Revenues
Which Way is Disney Moving?
The company is moving forward with anticipation as they
discover more exciting products and services through their
ongoing research and developments.
What Are Disney’s Sources of Capital?
Debt (Primarily long-term)
Equity (Preferred & Common)
Company has an Optimal Capital Focus
What is Disney’s Largest Asset?
Intangible Assets (Due to Costs in excess of ABC’s Net
assets acquired.)
What Are Two or Three Most Important factors for success in this
business?
Creativity
Innovation
Knowledge of Consumer Demands
AUDIT
RELATED
MATTERS!
-The Walt Disney Company’s annual report conveys the image of an
innovative and creative company on the leading edge of technology.
-The segments and functional contents of the report are the following:
TABLE OF CONTENTS
Financial Highlights
Broadcasting
Letter to Shareholders
Broadcasting continued…
Disney VoluntEARism
Management’s Discussion and Analysis
Environmentality
Consolidated Statements of Income
Financial Review
Consolidated Balance Sheets
THEME PARKS AND RESORTS
Consolidated Statements of Cash Flow
Disney’s Animal Kingdom
Consolidated Statements of Stockholders’Equity
Disney Cruise Line
Notes to Consolidated Financial Statements
Theme Parks
Quarterly Financial Summary
Walt Disney Imagineering
Selected Financial Data
CREATIVE CONTENT
Management’s Responsibility for Financial Statements
Motion Pictures
Report of the Independent Accountants
Television
Supplemental Information
Disney Feature Animation and Walt Disney
Theatrical
Board of Directors and Corporate Executive Officers
•There was an auditors report included in the annual report.
•The auditors were Price Waterhouse LLP, Los Angeles
•The report was essentially none other than a standard three
paragraph unqualified opinion. There was an addition paragraph
following the last paragraph referencing notes to the financial
statements that simply emphasizes what the management had
already addressed.
What Material Types of Transactions
and Transaction Cycles are Involved?
Sales & Sales Collection Cycles
Payables & Acquisitions and Payments Cycle
What are the High-risk Areas?
•Products Liability
•Patent Infringement
•Copyright Violations
•Other Liability Areas
•Overall Risk of the Entertainment Industry
What Sort of Legal, Regulatory, or Social
Matters are of Concern?
•Patents and Copyrights
•Special Interest Groups
What Notable Accounting Considerations
Are There For Companies In This
Industry?
•Matching Expenses With Revenues
•Revenue Recognition
•Contingent Liabilities
•Various Alternative Accounting
Procedures
•Accounting for the Impairment of LongLived Assets and for Long-Lived Assets to
be Disposed Of.
7)
The presidents message, graphical presentations and other
information provided, appears to be consistent with the information
provided in the financial statements and in the financial highlights.
Information was clear, concise and straight to the point The Chief
Executive Officer was honest about any issues that were facing
Disney.
8)
If I were to perform the next audit on this company, I would
concentrate on Euro-Disney which is located near Paris, France.
This subsidiary has not been a very profitable one.
Based on the annual report, there would only be a small
level of risk, after all, the audit was complete by early November
of last year. The financial information provided in the report was
detailed enough to provide an accurate account of the company’s
financial position.
How Many Auditors in Your Opinion Do
You Think You Would Need To Help You
Complete The Audit And How Long Would
It Take?
40 Auditors & Two Months