Calcbench Cheat Code for Comparing Disclosures

Our primary mission at Calcbench is to help financial analysts understand the information in corporate financial disclosures. Today we have an example of how that works in practice courtesy of disclosures just filed by publishing company Daily Journal Corp. 

Daily Journal ($DJCO) is a small publishing company based in Los Angeles that follows the legal profession in California and Arizona. It filed its 2025 annual report on Dec. 29, with $87.7 million in revenue and operating income of $9.53 million. 

We were skimming through Daily Journal’s footnote disclosures (because you should always look through the footnotes, people!) and stumbled upon the company’s Controls and Procedures footnote. This is a footnote all companies must include, where management discloses any material weaknesses in financial reporting and what management is doing to fix them. 

Material weaknesses are not welcome news. They imply that the company’s financial reports are less reliable and more prone to restatement, and the point of disclosing them is to light a fire under management’s rear end to improve financial reporting systems and fix them.

OK, back to Daily Journal. In its Dec. 29 filing, the company disclosed two material weaknesses. One was segregation of duties (that is, keeping accounting roles separate enough that no single person can use his or her permissions to commit fraud) and the other was review controls (so that management could easily examine and assess financial performance):

The company continues to have material weaknesses related to segregation of duties, review controls related to the design, implementation, and operation of controls over revenue recognition and associated deferred revenue processes that originated and were disclosed in prior periods. While management has implemented additional controls and made meaningful progress during fiscal year 2025, the company was not able to fully remediate the material weaknesses by September 30, 2025. Management’s remediation efforts continue, as described below, and management is confident in its ability to achieve a full remediation in fiscal year 2026. 

As material weaknesses go, it’s not unusual to have segregation of duties and review control weaknesses at the same time; the two are closely related. But we were intrigued by the casual mention of weaknesses “disclosed in prior periods.”

Hmmm. What did Daily Journal say about its material weaknesses in prior periods? How much progress has management made on improving the situation? 

In Calcbench, answering that question is a snap. We simply clicked on the “Previous Period” tab above Daily Journal’s 2025 disclosure to compare this year against the company’s 2024 disclosure filed one year ago. See Figure 1, below.

As you can see (if you squint; but trust us, it’s there), one year ago  Daily Journal had an additional material weakness of “insufficient accounting resources.” Specifically, the company didn’t have a dedicated internal audit team that could test and improve financial controls, so the accounting team was basically cross-checking each other’s work to intercept mistakes or other accounting shenanigans.

If you then go back to the 2025 disclosure filed this week, you can see how Daily Journal has rectified its accounting situation so far. The company disclosed three specific steps: (a) hiring more staff for the accounting team; (b) hiring a new CFO as of Dec. 12; and (c) implementing a new ERP software system for a major subsidiary with complicated accounting needs.

That’s a big step in the right direction. The question for Daily Journal investors now is whether the company will rectify its remaining material weaknesses (the segregation of duties and review controls) in the year to come.

Management says that should happen in the next 12 months. Will it? The only way to find out is to keep following Daily Journal’s disclosures closely and then compare new disclosures to the old to see how things have changed. Calcbench lets you do both.