SEC Filing Cites 'Material Weaknesses' In WWE's 'Commitment To Integrity And Ethical Values'

One of the most significant developments in pro wrestling history went down earlier this summer, when Vince McMahon resigned from all WWE duties in the wake of sexual misconduct allegations involving non-disclosure agreements and unaccounted hush money payments to former staff. With the emergence of WWE's SEC financial report for Q2 this morning, we now have a better understanding of what led to the discovery of McMahon's actions, and where the company feels it must improve.

The report notes that WWE didn't keep "an effective control environment to enable the identification and mitigation of risks of accounting errors," specifically citing "material weaknesses" in WWE's "commitment to integrity and ethical values" and "establishing structures, reporting lines, and appropriate authorities and responsibilities." Another reason given was that executive management at the time wasn't providing the "tone" required to guarantee "the expectations of the board of directors concerning the importance of integrity and ethical values was demonstrated by current and former executive management," "accountability for the performance of internal control over financial reporting responsibilities," or that "personnel with key positions had the appropriate training to carry out their responsibilities."

WWE admits in the report that their procedures for "preventing or detecting omissions in contractual arrangements and agreements that require accounting evaluation" must also be adjusted, so that trustworthy individuals oversee the department with the appropriate standards. These faults also affect components like the company's risk assessment, control activities, and monitoring abilities. The text includes ways WWE hopes to improve these departments.

"Our management is committed to remediating identified control deficiencies (including both those that rise to the level of a material weakness and those that do not), fostering continuous improvement in our internal controls and enhancing our overall internal controls environment," the report reads.