COMPANY’S INDUSTRIES?COMPANY’S INDUSTRIES?•Entertainment

•Broadcasting

•Movie Production

•Travel & Tourism

•Hotel & Resort

•Theme Park

•Publishing

•Consumer Products

•Music and Sports

PRIMARY PRODUCTS?- -Movies

-Animated Cartoons-Licensed Products-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

(or)SERVICES?

RAW MATERIALS?

•Various Synthetic Materials•Wood •Steel•Iron•Cotton•An Infinite Number of Other Things

HOW

LARGELARGE IS DISNEY?

Consolidated Revenues: $22,473,000,000Total Combined Assets: $37,776,000,000 Total Number of Employees: A Lot !

Company Location?500 South Buena Vista StreetBurbank, 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 RevenuesInternational Revenues

Which Way is Disney Moving?The company is moving forward with anticipation as they discover more exciting products and services through theirongoing 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 thisbusiness?

CreativityInnovationKnowledge 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

Letter to Shareholders

Disney VoluntEARism

Environmentality

Financial Review

THEME PARKS AND RESORTS

Disney’s Animal Kingdom

Disney Cruise Line

Theme Parks

Walt Disney Imagineering

CREATIVE CONTENT

Motion Pictures

Television

Disney Feature Animation and Walt Disney Theatrical

Consumer Products

Broadcasting

Broadcasting continued…

Management’s Discussion and Analysis

Consolidated Statements of Income

Consolidated Balance Sheets

Consolidated Statements of Cash Flow

Consolidated Statements of Stockholders’Equity

Notes to Consolidated Financial Statements

Quarterly Financial Summary

Selected Financial Data

Management’s Responsibility for Financial Statements

Report of the Independent Accountants

Supplemental Information

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 CyclesPayables & 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 Long-Lived 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