Internal controls over financial reporting
Internal controls over financial reporting in Healthcare & Life Sciences sit under active scrutiny from the U.S. Securities and Exchange Commission, the Public Company Accounting Oversight Board, and the U.S. Department of Health and Human Services Office of Inspector General, each approaching the same balance-sheet and revenue-recognition exposures from different enforcement angles. The SEC's continued focus on non-GAAP adjustments and segment reporting in pharmaceutical and medical device companies means ICFR deficiencies that once drew a comment letter are now triggering restatement inquiries. Compliance teams in this sector are stress-testing revenue recognition controls under ASC 606, particularly around gross-versus-net treatment of specialty pharmacy arrangements and government rebate accruals.
Watch
- PCAOB Staff Spotlight on revenue recognition controls at life sciences issuers
- SEC comment letter patterns targeting non-GAAP reconciliation in drug pricing disclosures
- OIG Work Plan items touching financial relationship reporting under the Anti-Kickback Statute
- Material weakness disclosures tied to ERP migrations at mid-cap medtech companies
- ASC 606 gross-versus-net classification for specialty pharmacy and GPO arrangements
Recent material activity in Healthcare & Life Sciences
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FDA issues Complete Response Letter for novel GLP-1 receptor agonist oral formulation
The FDA issued a CRL for a once-daily oral GLP-1 receptor agonist citing manufacturing consistency concerns at the primary production facility. The agency requested additional CMC data and a pre-approval inspection befor…
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