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Conclusion of ethical behaviour in the workplace
Conclusion of ethical behaviour in the workplace
Conclusion of ethical behaviour in the workplace
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Bausch + Lomb, now a division of Valeant Pharmaceuticals International, Inc. began in 1853 in Rochester, New York, as a small optical shop that grew to become a multi-billion dollar corporation with approximately 12,000 employees worldwide. Its mission is to help you see better to live better, and to protect and enhance the gift of sight. Its products consist of three different marketed goods. The first of which is its vision care segment that includes products such as contact lenses, and solution to clean and care for them with. Its second line of products is pharmaceuticals, such as over the counter eye drops, as well as medicine to treat a range of eye conditions such as glaucoma and conjunctivitis. Bausch and Lomb’s last line of products include a full suite of products such as intraocular lenses and other surgery equipment needed for cataract and vitreoretinal surgeries (About Bausch + Lomb).
However, in the 1990s the company’s vision care sector ran into ethical accounting issues relating shipment of its product and the subsequent revenue recognition. The market for contact lenses began shifting away from traditional contact lenses, and instead became focused on the new frequent replacement and disposable lens model created by Johnson and Johnson (Maremont). Where Bausch and Lomb went wrong is, “The company increased reported revenues from sales of contact lenses and sunglasses by shipping the products to warehouses although there were no legitimate orders, by secretly agreeing to allow customers to return unwanted lenses and by recording sales in the fiscal year 1993 even though the items were not shipped until after the fiscal year ended on Dec. 25.” (Norris). This process is known as channel stuffing, and done by forcing...
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... better position than they truly are to encourage extra investment, and approval of new loans. The practice of channel stuffing, while beneficial in the short term, is very detrimental to a company’s long-term financial healt
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ARB43, Ch.4, Par.9 ?Where evidence indicates that cost will be recovered with an approximately normal profit upon sale in the ordinary course of business, no loss should be recognized...?
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Throughout the past several years major corporate scandals have rocked the economy and hurt investor confidence. The largest bankruptcies in history have resulted from greedy executives that “cook the books” to gain the numbers they want. These scandals typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of assets or underreporting of liabilities, sometimes with the cooperation of officials in other corporations (Medura 1-3). In response to the increasing number of scandals the US government amended the Sarbanes Oxley act of 2002 to mitigate these problems. Sarbanes Oxley has extensive regulations that hold the CEO and top executives responsible for the numbers they report but problems still occur. To ensure proper accounting standards have been used Sarbanes Oxley also requires that public companies be audited by accounting firms (Livingstone). The problem is that the accounting firms are also public companies that also have to look after their bottom line while still remaining objective with the corporations they audit. When an accounting firm is hired the company that hired them has the power in the relationship. When the company has the power they can bully the firm into doing what they tell them to do. The accounting firm then loses its objectivity and independence making their job ineffective and not accomplishing their goal of honest accounting (Gerard). Their have been 379 convictions of fraud to date, and 3 to 6 new cases opening per month. The problem has clearly not been solved (Ulinski).
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...and investors to invest. No shareholder or investor wants to see that the company they are putting their money into is not performing as they had hoped. Furthermore, by having more investors AdCom will be able to expand its product lines and grow their company.
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