I recently discovered a new accounting term in the 2022 annual report of Associated British Foods: headroom. I had always thought this was the space between the top of my head and the ceiling. However a more figurative meaning of headroom does exist meaning: ‘freedom of action’, and perhaps accountants have adapted this meaning to…
A risk specific to the pharmaceutical industry, which is also business as usual, concerns patient safety. However governments worldwide have stepped in to control the industry. One could therefore argue that the risk moves from the pharmaceutical companies to the governments. And if all parties follow the regulations and if the regulations are adequate, the…
What could management override mean? I recently discovered it in the Key Audit Matters as part of the 2022 annual report of Associated British Foods. The auditors consider that there could be ‘pressure on management to manipulate revenue recognition’. And they go on: “There is a risk that management may override controls intentionally to misstate…
Sanofi in their 2021 annual report agree with me: “Unsuccessful management of environmental, social and governance matters could adversely affect our reputation and we may experience difficulties to meet the expectations of our stakeholders.” The key word here is ‘unsuccessful’. Unsuccessful management of any part of the business could result in the company experiencing difficulties…
Back in 2021 Reuters published an article entitled: “Bristol-Myers, Sanofi ordered to pay Hawaii $834 million over Plavix warning label.” [1] Explaining that the two companies engaged in unfair and deceptive business practices for more than 10 years. So I decided to follow how they report and record the penalty in their financial statements. The…