Which company was accused of using deceptive accounting in the 1938 McKesson & Robbins scandal?

McKesson & Robbins was accused of using deceptive accounting in the 1938 corporate scandal.

The company appeared to be a successful pharmaceutical distributor, but investigators discovered that a major part of its business was fictitious. Fake customers, fake inventory, and false sales records helped inflate assets and profits.

The scandal centered on president Philip Musica, who had used aliases and had a criminal past. When the deception was exposed, the case revealed serious failures in auditing and corporate governance, including inadequate verification of receivables and inventory.

The McKesson & Robbins scandal helped drive reforms in auditing practice and board oversight. It is frequently cited in accounting history because it demonstrated that auditors could not rely only on company records without independently confirming important assets and transactions.