Cablevision's Rainbow Media has fired 14 employees, including AMC
president Katie McEnroe, after an investigation into mishandling of around $18
In a statement, the company said employees had been playing accounting games
with $6.2 million by booking expenses in 2002 that weren't actually going to be
incurred until 2003.
The company wouldn't disclose the purpose of the sleight of hand.
One goal could have been to give AMC executives some financial running room
for the year ahead.
If it's clear a division is going to exceed its financial goals, expenses
anticipated for the following year can be booked in advance, making it easier to
hit budget targets the following year.
But that also distorts the unit's financial performance, a particularly bad
problem for a publicly traded company.
Cablevision said it caught all but $1.7 million of the
advance accruals before reporting its full 2002 results to the SEC in March, but
said it also has uncovered games for similar amounts in 2000 and 2001.
Because all the amounts are small compared to Rainbow's $653 million in 2002
revenues and Cablevision's $4 billion in revenues, the company doesn't plan to
restate past results.