Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Bristol-Myers Squibb (BMS) is a multinational pharmaceutical company founded in 1989 from two other companies founded in the 1800s. It is headquartered in New York City with revenues of over $9 billion and almost 30,000 employees worldwide. The company manufactures pharmaceuticals in several therapeutic areas: cancer, cardiovascular disease, diabetes, hepatitis, rheumatoid arthritis, HIV, and psychiatric disorders. The company's primary research sites are located in New Jersey, Connecticut, Belgium, Tokyo, and Bangalore, India. The company has had some rough times in the past few years, and has been involved in a major restructuring that focuses on both the pharmaceutical and biological products divisions. This restructuring also includes productivity initiatives and cost-cutting/streamlining business operations through a program of layoffs and reduced subsidies for retirees and pensions plan reductions (Dey, 2010).
Accounting Fraud - BMS was involved in a major accounting scandal in 2002 that resulted in the need to drastically restate revenues for the three years of 1999, 2000, and 2001. This was the result of booking sales of excess inventory to customers to create higher sales number,...
Essentially, BMS was accused of fraudulently forcing more products through the distribution channels than could possibly be delivered, usually based on the short-term objectives of making quarterly sales goals but detrimental to the long-term health of the company and the truth and transparency of taxable profits towards shareholders. The process has a number of long-term consequences to the company. Not only does it distort the books, but distributors often return unsold goods that cause fluctuating demand, excess inventory and spiraling distribution control problems. According to the U.S. Justice Department and SEC, BMS:
engaged in a series of anticompetitive acts over the past decade to obstruct the entry of low-price generic competition for three of Bristol's widely used pharmaceutical products: two anti-cancer drugs, Taxol and Platinol, and the anti-anxiety agent BuSpar. Bristol avoided competition by abusing federal regulations to block generic entry; deceived the U.S. Patent and Trademark Office (PTO) to obtain unwarranted patent protection; paid a would-be generic rival over $70 million not to bring any competing products to market; and filed…
REFERENCES
Bristol-Myers Squibb Company. (2012). Audit Committee Charter. Retrieved from:
http://www.bms.com/Documents/governance/audit_charter.pdf
Dash, E. (August 5, 2004). Bristol-Myers Agrees to Settle Accounting Case. The New York
Times. Retrieved from: http://www.nytimes.com/2004/08/05/business/bristol-myers-agrees-to-settle-accounting-case.html
http://www.reuters.com/article/2010/11/28/us-drugs-restructuring-idUSTRE6AR1NJ20101128
The U.S. Federal Trade Commission. Retrieved from: http://www.ftc.gov/opa/2003/03/bms.shtm
As opposite, in private sector accounting (for the purpose to improve the financial position of the company) the sales are recognized when the products or services have been rendered and the payment has been received or is expected to be received in a very short time. The costs are recognized as deduction from income if there is a subjective view that these costs are to lead to future income
GASB No.34's government financial reporting model: Evidence on its information relevance, published in The Accounting Review. This article looks at a government accounting regulation, GASB No. 34, which requires lower level governments to provide "consolidated, government-wide financial statements.," which of course will require reconciliation between the different entities and the overall government financial statements. The authors examine this regulation from the perspective of its main objective, which is to
Government Accounting Office in America (GAO) This is an examination of the Government Accounting Office in America. The writer discusses the history, purpose and background of the GAO as well as the duties that the office is charged with performing. The writer then analyzes literature that illustrates the office in action. The final discussion revolves around the question, "Is the office effective or is it a waste of money." There were
Accounting Information System: Role of Relevance and Reliability in the Conceptual Framework The development any system, whether manual or automated, requires a conceptual framework that serves as the foundation for the establishment of requirements, policies, standards and procedures. From the conceptual framework, the various applications can be developed and when these proved to be effective and efficient, best practices are established and become the model for other systems to follow. Developing an
Accounting Fundamentals for Healthcare Management This paper examines governmental and nonprofit accounting and discusses how it differs from commercial accounting. In the accounting field, there may not always be a clear distinction between the three types of organizations. The dividing line between business and nonbusiness organizations may depend on the incidence and relative importance of the nonbusiness characteristics found in an entity. The funds of such organizations are usually earmarked for
Accounting, by its nature, requires a set of standards that are exactly the same industry-wide. If there were not established rules for determining revenues, profits, expenses, and other influences on a company's bottom line, there would be no way to evaluate a corporation's effectivity, production, or potential. A lack of established standards would also mean that no two companies could be honestly compared, since their accounting methods could be so