...UNIVERSITI UTARA MALAYSIA COLLEGE OF BUSINESS FIRST SEMESTER SESSION 2013/2014 BKAL3063 INTEGRATED CASE STUDY GROUP F (2) CASE 3: BIOVAIL CORPORATION - REVENUE RECOGNITION AND FOB SALES ACCOUNTING PREPARED FOR: AMIN BIN ALI PREPARED BY: GAN PEI WEN 205401 SARA LEE HWEI MEI 206998 THEH JIA HUI 207133 JUMAIAH BINTI YASIN 207827 AISHA ANUAR 207919 DATE OF SUBMISSION: 21st OCTOBER 2013 TABLE OF CONTENTS INTRODUCTION 1 ISSUES 1 QUANTITATIVE ANALYSIS 2 QUESTION 1 2 QUALITATIVE ANALYSIS 3 QUESTION 2 3 QUESTION 3 4 QUESTION 4 5 RECOMMENDATION 6 CONCLUSION 6 REFERENCE 7 INTRODUCTION Biovail Corporation is one of the largest Canadian pharmaceutical companies, public traded on the New York Stock Exchange. The company’s products are commercialized and distributed locally (in Canada) and internationally through strategic partners. Biovail applies advanced technology on drug delivery, focusing on several main therapeutic areas such as central nervous system disorder, pain management, and cardiovascular disease. Biovail utilizes its expertise in development and large scale manufacturing, by focusing on enhanced formulations of existing drugs, combination products which use different drug classes, and difficult-to-manufacture generic pharmaceuticals. David Maris is an analyst at Banc of America Securities (BAS), assigned to cover on Biovail’s stocks. Maris did not like what he saw at the company, but neither did he like giving...
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...11 INTRODUCTION Biovail Corporation was one of the Canada’s largest pharmaceutical publicly traded companies which expert in the development and large scale of manufacturing of pharmaceutical products. Biovail Company engaged activities on enhance formulate of the existing drugs, clinical testing, manufacture and commercial pharmaceutical products and utilized advanced drug delivery technologies. This company had listed on the Toronto and New York Stock Exchange (NYSE). In the case, on September 30, 2003 there was a truck carrying a shipment of Wellbutrin® XL from Biovail’s manufacturing facility in Manitabo to Biovail’s Distributor, North Carolina was involved in a multi-vehicle traffic accident near Chicago. The company announced that the loss of the quarterly earnings which target by $260 million is because of the truck accident happened that contributed a significant unfavourable variance where the company estimated that revenue of the truck that involved in accident was in the range of $10 million to $20 million. There are several issues that addressed in this case which included accounting policy based on the revenue recognition; how Biovail Corporation should account the sales based on two different “Freight On Board” (FOB) point which are FOB Shipping point and FOB Destination point, and ethic of earning management where Biovail is suspected might significantly overestimate the value of the product that involved in the truck accident due to Biovail fail to meet its...
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...Plaintiff SECURITIES AND EXCHANGE COMMISSION New York Regional Office 3 World Financial Center New York, NY 10281 (212) 336-1120 UNITED STATES DISTRICT COURT -SOUTHERNDISTRICT OF NEW YORK SECURITIES AND EXCHANGE COMMISSION, Plaintiff, 08 Civ. ECF CASE BIOVAIL CORPORATION, EUGENE N. MELNYK, BRIAN CROMBIE, JOHN MISZUK, and KENNETH G. HOWLING, Defendants. COMPLAINT Plaintiff Securities and Exchange Commission, for its Complaint against Defendants Biovail Corporation ("Biovail" or the "Company"), Eugene N. Melnyk, Brian Crombie, John Miszuk and Kenneth G. Howling (collectively, "Defendants"), alleges as follows: SUMMARY OF ALLEGATIONS 1. This case involves chronic fraudulent conduct - including financial reporting fraud and other intentional public misrepresentations - by Biovail Corporation, a Canadian pharmaceutical company whose common stock is traded on the New York and Toronto stock exchanges. Obsessed with meeting quarterly and annual earnings guidance, Biovail's executives repeatedly overstated earnings and hid losses in order to deceive investors and create the appearance of achieving that goal. And, when it ultimately became impossible to continue to conceal the Company's poor performance, Biovail actively misled investors and analysts as to its cause. This corrupt strategy was employed by Biovail's most senior officers: Eugene Melnyk, former chairman and chief executive officer; Brian Crombie, former chief financial officer; Jo,hn Miszuk, vice...
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...Craig Chapman, Page 1 CRAIG J. CHAPMAN Assistant Professor - Accounting Information and Management Kellogg School of Management, Northwestern University Jacobs Center, Room 6227, 2001 Sheridan Road, Evanston, IL 60208 Telephone: (847) 491-2662, Fax: (847) 467-1202 E-mail: c-chapman@kellogg.northwestern.edu SSRN Research Page: http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=417740 Education HARVARD BUSINESS SCHOOL, BOSTON, MA Doctor of Business Administration degree, Accounting and Management, 2008. Dissertation Committee: Professors Paul M. Healy, V.G. Narayanan & Thomas J. Steenburgh. HARVARD BUSINESS SCHOOL, BOSTON, MA Master of Business Administration degree, 2003. Graduated with High Distinction as a George F. Baker Scholar. UNIVERSITY OF OXFORD – MAGDALEN COLLEGE, ENGLAND Master of Arts degree in Mathematics, 1995 Bachelor of Arts degree in Mathematics, 1989. Graduated with Honors. Publications “Buy-Side vs. Sell-Side Analysts’ Earnings Forecasts” with Boris Groysberg and Paul M. Healy. The paper examines relative accuracy and bias of different analysts and proposes a number of possible explanations for the findings that the analysts at the Buy-side firm studied appear significantly less accurate and more optimistic than those working for sell-side firms. Financial Analysts Journal, July/August 2008, Vol. 64, No. 4: 25-39. “An Investigation of Earnings Management through Marketing Actions” with Thomas J. Steenburgh. Combining new, hand-collected...
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...CORPORATE SOCIAL RESPONSIBILITY IN THE PHARMACEUTICAL INDUSTRY: BETWEEN TREND AND NECESSITY by Cecile Oger BSc. (Honours) Chemistry with Business Administration Kingston University London, UK, 1995 A thesis presented to Ryerson University In partial fulfillment of the requirements for the degree of Master of Business Administration In the program of Master of Business Administration Toronto, Ontario, Canada, 2009 © Cecile Oger 2009 Library and Archives Canada Bibliothèque et Archives Canada Published Heritage Branch Direction du Patrimoine de l’édition 395 Wellington Street Ottawa ON K1A 0N4 Canada 395, rue Wellington Ottawa ON K1A 0N4 Canada Your file Votre référence ISBN: 978-0-494-59035-5 Our file Notre référence ISBN: 978-0-494-59035-5 NOTICE: AVIS: The author has granted a nonexclusive license allowing Library and Archives Canada to reproduce, publish, archive, preserve, conserve, communicate to the public by telecommunication or on the Internet, loan, distribute and sell theses worldwide, for commercial or noncommercial purposes, in microform, paper, electronic and/or any other formats. . The author retains copyright ownership and moral rights in this thesis. Neither the thesis nor substantial extracts from it may be printed or otherwise reproduced without the author’s permission. L’auteur a accordé une licence non exclusive permettant à la Bibliothèque et Archives Canada de reproduire, publier...
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