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What do you expect will be the impact of the increased fines in the (i) earnings and (ii) management compensation contracts, of firms in the pharmaceuticals industry? explain in more than 300words

Sagot :

When a court found you convicted and fined you, then the details about your income will be requested. The penalty is determined based on the criminal type, which can be defined as follows:

Earnings:

  • The increased fines will lower incomes because the expenses of fines will raise companies' costs when companies breach the promotional rules.
  • In addition, the drop in advertising for prescription drugs will lead to a decrease in the revenue generated by pharma firms.

Management compensation setting the Drugs Code By Connail Emma:

  • Increasing fines will lead to a decline in the compensation agreements for management.
  • The extent of the contracts between companies and their promotion agency will be less effective.
  • The policies and principles of accounting are accounting standards.
  • The amount indicated as profit may be affected by different accounting rules.
  • The effect of higher penalties is increased transparency of ethical practice and increasing obscurity of ethical practices in reporting.

This relationship is based on the following:

  • The rise in fines for pharmaceutical corporations helps to minimize unethical types of promotion, however, the amount paid by fines for corrupt activity is diminished by the considerable profitability and market share gained from this.
  • The introduction of fines would encourage greater openness in which the corporation is morally inclined to comply with marketing rules such that money is paid to doctors just on basis of indiscretions.
  • However, gaining significant profits by engaging themselves in unethical practices might stimulate the profession of bookkeeping, which focuses on the profit of the business and so enhances the lack of financial transparency to lower the amount of money paid as fines.
  • Since fines are less than profit, higher fines inside the pharmaceutical companies lead to less openness when companies try further to enhance earnings by suffering fewer penalties. So because financial data is less than financial gain.

Learn more:

brainly.com/question/24529367

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