Posted by & filed under Accounting Principles, Advanced Accounting, Auditing, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Video Updates.

It is estimated that between 50,000 to 100,000 patients died or had a heart attack as a result of taking the drug Advandia. For seven years, GlaxoSmithKline (GSK) failed to report data that indicated Advandia increases the risk of heart attack by 40%. As we reported back in July, in the biggest health care fraud settlement in US history, a federal judge approved a fine totalling $3bn for criminal and civil violations by the British pharmaceutical giant, GSK. This video provides additional critical discussion regarding the ethics of this situation.

1. What was unusual about the suit against GSK? What were the consequences of the criminal charges?
2. How should GSK record the outcome of the suit in their financial records?
3. Do you think that drug companies put profits before patients? Why or why not?
4. Discuss the ethics of building in drug health risks into market expectations.
5. What was the most surprising fact that you learned about the drug industry from this video?

Aljazeera video (2012). GlaxoSmithKline fraud case: Does Crime Pay? Inside Story Americas, July 10 (Retrievable online at