Merck & Co. Inc. and Novartis International AG



Merck & Co. Inc. and Novartis International AG

Merck & Co. Inc.

Accounting Standards

Merck Inc applies FASB. The recent issue of this accounting standard sheds light on the recent requirements and amendments. It has resulted in the simplification of an organization testing indefinite lived intangibles with respect to impairment. It facilitates companies to evaluate the qualitative aspects of the indefinite loved intangibles in order to identify the requirement for conducting a sanative analysis with respect to destination of quantitative impairment test. This procedure is applicable to annual and semiannual impairment test. These standards are applied for presentation of comprehensive income. FASB has been regulating private sector since 1973 and states certain rules and regulations according to which financial reports are prepared.

Auditing standards

The external auditors are comprised of independent directors, independent external auditors belonging to another audit firm and the internal auditors along with top management. The external auditors conduct auditing on approval and recognition of written agreement from company that states the requirement for full disclosure of information. It is necessary to be done in order to comply with the Public company accounting oversight Board. The external auditors are given authority to have meetings with the internal auditors in absence of management and possess full access to information. The external auditors work to assure and evaluate the quality of financial reporting and check the adequacy of internal controls. The judgment of external auditors shed light on the company's accounting principles, the degree of clarity in disclosing information, and the extent to which the company ahs aggressive policies in this regard, the extent to which accounting principles can be converted, and other relevant matters. The external auditors are required to comply with the Auditing standard No. 61

The audit firm is also required to obtain the approval in the beginning of audit from audit committee. The audit fees charged by the independent audit firm as per PwC are estimated to be $27.5 million for providing all the aforementioned services. The audit related fees for merging plans, employee benefit plan, and reviewing financial statements are estimated to be $5.9 million. The tax related fees is calculated to be $9.3 million in 2012 and fees for compliance is $2.5 million. All other fees charged by the admit firm is calculated to be $5.6 million (Merck & Co. Inc, 2012).

Novartis International AG

Accounting Standards

The accenting standards and policies of the ...