Philip Musica who used the name F. Donald Coster bought the McKesson & Robbins in 1926 (Foster, p. 5). The owners of McKesson & Robbins sold the company which F. Donald Coster bought. Philip Musica had been involved in several fraud cases before he bought the pharmaceutical company Mckesson & Robbins.
The Musica family had been involved in a scandal in which the family bribed custom officials. “The Musicas had been paying fine Italian cheeses recorded at a fraction of their actual weight allowing the family to avoid tariffs and to make profits far above those of their competitors” (Foster, p. 2). They were soon caught and Philip Musica was imprisoned for a short period. After Philip Musica was released, the Muisca family started a hair company in which they also committed fraud. Philip’s mom Assunta “returned to Naples with letters of introduction and set about t courting Italian bankers from whom she obtained large loans using her invoices for human hair as collateral” …show more content…
In school, we learn about the impacts of the Enron and WorldCom scandals but we do not hear too much about other cases. However, after reviewing the case, many of the changes to the generally accepted accounting procedures are a result of frauds. Frauds prompt change to the procedures to prevent these types of situations from occurring which ultimately make it safer for stockholders because they can rely on the financial information being presented. Furthermore, it is interesting because, in this case, it shows the elaborate scheming of Philip Musica and his family. They concocted this whole plan to make it seem real when it was all false. Finally, this fraud case “led to the adoption of Generally Accepted Auditing Standards, including the concept of an independent audit committee” as well as “having auditors personally inspect inventory to verify its existence” (Fox). This improved the auditing quality and the accounting
The Musica family had been involved in a scandal in which the family bribed custom officials. “The Musicas had been paying fine Italian cheeses recorded at a fraction of their actual weight allowing the family to avoid tariffs and to make profits far above those of their competitors” (Foster, p. 2). They were soon caught and Philip Musica was imprisoned for a short period. After Philip Musica was released, the Muisca family started a hair company in which they also committed fraud. Philip’s mom Assunta “returned to Naples with letters of introduction and set about t courting Italian bankers from whom she obtained large loans using her invoices for human hair as collateral” …show more content…
In school, we learn about the impacts of the Enron and WorldCom scandals but we do not hear too much about other cases. However, after reviewing the case, many of the changes to the generally accepted accounting procedures are a result of frauds. Frauds prompt change to the procedures to prevent these types of situations from occurring which ultimately make it safer for stockholders because they can rely on the financial information being presented. Furthermore, it is interesting because, in this case, it shows the elaborate scheming of Philip Musica and his family. They concocted this whole plan to make it seem real when it was all false. Finally, this fraud case “led to the adoption of Generally Accepted Auditing Standards, including the concept of an independent audit committee” as well as “having auditors personally inspect inventory to verify its existence” (Fox). This improved the auditing quality and the accounting