Bristol-Myers Squibb (BMS) Improper Inflation of Revenues Using Sales Incentives

Choose one of the firms, other than WorldCom, listed on Exhibit 1, “Prominent Business Scandals Revealed between 1998 and 2002”, in the chapter on “Ethics” in your text,. Write a brief (maximum of two pages, typed, 12 point font, double spaced) description, including the name of the Company chosen and the means by which the firm committed, or was alleged to have committed, the accounting fraud listed after their name in the table. You should describe what was done, and how it impacted the financial statements. Be sure you think through the entire chain of impacts. Specifically, think through, and describe, at a high level the linkages between the income statement (revenue and expenses), balance sheet (assets, liabilities and equity sections) and the cash flow statement (cash flow from operation, operating cash flows, investments and financing). Describe the impacts in both the current accounting period, and any effects that the actions taken would have in future accounting periods.
This is an individual assignment, not a collaborative effort. You may use whatever sources are available to you, but you must describe the situation in your own words and be prepared to discuss if called on in class. Again this should be a high level description along the lines of “Decrease current expense by capitalizing expenditures that should have been expensed, which lowers expense (current period), increases net income (current period), increases assets, increases equity via retained earnings (current period), increases depreciation expense (future periods), etc, etc.