The pharmaceutical industry has been criticised in the financial press for recognising excessive profits and investing less in research and development so that the government is threatening the removal of tax concessions to the industry.Under these conditions,PAT predicts that pharmaceutical companies are subject to ___________ costs and are likely to adopt _________________ accounting policies

Question

Quizplus · Accepted Answer

The government's threat to remove tax concessions implies political pressure on pharmaceutical companies. under such circumstances, companies would be subject to political costs and are likely to adopt income decreasing or conservative accounting policies to avoid further government scrutiny and criticism.

The Pharmaceutical Industry Has Been Criticised in the Financial Press