Since the Authors Guild [sic] has (rather unwisely, IMNSHO) gone public with its intent to "study" accounting practices at F&W Publication, I feel able to engage in unlimited snarkery.
First, what did anyone really expect? F&W has demonstrated for years that it couldn't spell "conflict of interest" if you spotted it the first seventeen letters. Interviews in its magazines with advertisers; the so-called "classified ads" in WD; the list goes on. Given that kind of rampant arrogance, should one expect anything less in the back office where nobody expects to ever have anything disclosed to anyone else?
Second, this also reflects one of the longstanding problems with so-called "territorial rights." In my experience, one can find accounting errors in twelve out of every ten royalty statements that purport to split "territorial rights" payments, and every one of those twelve will be to the author's disadvantage. Sometimes these are subtle errors, such as crediting payments to the wrong royalty period, or against the wrong title in a multibook contract. Sometimes they are more blatant, such as surcharging the author for foreign-currency conversions. And sometimes they are outright lies. Ultimately, accounting problems are a virtually inevitable consequence of the publishing industry's concerted ignorance that it is engaging in licensing transactions, not sales, and that there are different accounting standards for licensing (which, BTW, would prevent at least three out of those twelve errors I cited earlier).
Third, and perhaps most important: What does this say about the credibility of WD as a resource for writers? Well, not much that I haven't been grumbling about for several years.
In the end, this mess will get blamed on the management and ownership instability at F&W over the last few years. I'm certain that was a contributing factor, particularly given the "spreadsheet cruncher" attitude brought to F&W by Citicorp's investment subsidiary a few years back. (Note to spreadsheet crunchers: "ROI" is an unhelpful measurement in an industry founded on mercantilist economics, as opposed to the comparative advantage/protocapitalist economics you learned in MBA school; in fact, it is explicitly invalid.)