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Sleeping Well Amidst Increasing Government Scrutiny

Here Are Practical Ways to Examine FCPA Compliance



March/April 2012

mark-jenkins-80x80   christopher-meadors-80x80   FraudBasics 


MarchApril-money-on-scaleFADE IN: You're the CEO of a prosperous and growing company. As you review your most recent quarter's financials, you settle into a state of satisfaction. Revenue has doubled, largely due to your recent global expansion. However, your enjoyment of this hard-earned accomplishment is abruptly shattered when the general counsel bursts into your office. "The SEC has sent us a subpoena," she says. "Potential illicit payments paid to government officials by our agents in several of our offshore operations." You are suddenly flooded with thoughts: What did we do wrong? Why didn't we know about this sooner? What do we do now?


FADE OUT …


While most companies doing business abroad have some kind of policy or program to address Foreign Corrupt Practices Act (FCPA) risks, dangerously few can be described as "state of the art." Companies will continue to feel the pressure of looking abroad for cost-effective manufacturing and new markets. At the same time, the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are becoming more aggressive with all types of enforcement. With these increasing risks and regulatory pressures, such as the new Dodd-Frank whistleblower "jackpot" provisions, it's critical that companies get serious about adopting a robust and structured approach to deal with these "sleep well" risks.1 For most, this will mean a second look at their FCPA compliance programs and policies to see if they are in need of an upgrade. (See "How Vigilant is Vigilant Enough?" on how to use transactional data testing to multiply your FCPA compliance and investigative efforts. – ed.)  

 

MISTAKENLY INSUFFICIENT 

 
FCPA risks are nothing new. The act has been with us since 1977, and the U.S. federal government regularly reports high-profile enforcement actions. Companies doing business abroad recognize the risks and believe, often mistakenly, that their compliance programs and controls are sufficient to address them. Those companies who have recently been in the news with FCPA-related investigations or alleged violations had at least nominal FCPA safeguards in place. However, those policies were too general and not tailored to the practical challenges the companies faced.

       


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Foreign Corrupt Practices Act (FCPA): What Fraud Examiners Should Know
2012 Fraud Examiners Manual, US Edition
2012 CFE Exam Prep Course, US Edition

 

 

 
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