COMPANYS INDUSTRIES Entertainment Broadcasting Movie Production Travel Tourism

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 Total Combined Assets: $37, 776, 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

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 Volunt. EARism 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 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