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Accounting Provisions of FCPA

Accounting Provisions of FCPA

 

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Full video transcript available below:

Hello and welcome to today's webinar hosted by me, Joe Boyhan of MCO, and Paul Murdock of MCG Compliance Services. Today, we're going to be looking at the Foreign Corrupt Practices Act or the FCPA.

I now want to pass you on to Paul, who's going to start today's webinar. 

As I mentioned a large part of this really, you know, functions around the accountant provisions, right? So, before I talk about accountant provisions per se, I mean, let's just think about it. So, typically, you know, if you were trying to bribe someone to have an influence here, you're really not trying to create a large paper trail.

So, you're not trying to put bribes on your books and records. The element the Accountant Provisions Act, really, kind of, seals the deal, so to speak, in these violations, right, because, as I said before, you're typically not accounting for bribes. So, this really talks about the fact in the cases that, you know, these payments, illicit payments, are not put on the books. When the Act was amended, this was something that really gave it a lot of teeth.

Let's just talk about definitively, what it means. So, the FCPA's Accounting Provisions contain two main components, the books and record provision requires issuance to make and keep records that accurately and fairly reflect an issuance transaction, in this position of assets. The books and records provisions are intended to prevent the mischaracterization of concealment of fines, as I said. We should also ... I should also mention that as we talk about this, keep in context that we're talking about reporting companies, SEC reporting companies. Not private companies.

So, the FCPA also contains provisions regulating internal control, which requires that the issuance devise and maintain a system of internal accountant control. Sufficient issuance management controls authority and responsibility over the firms assets. As we talk about a number of these cases you will see that one of the major flaws, or gaps, in these organizations, why they did not find a possible bribery, is that a lot of times the accountants controls are not there and people have been able to usurp the accountant controls and get around it. You really don't have, in many cases, the appropriate checks and balances.

So, as you read through some of the cases, a lot of it goes to the fact that check and balances are not there. That is something that always, kind of, gets put into the cases themselves, you know, as the DOJ or SEC writes them up as well.

Alright, there's civil liability under the account provisions for those companies and individuals. In addition both individuals and companies can be criminally liable for knowingly failing to comply with FCPA's accounting provision. You know, as I said once again, it only applies to issuance and not a private company, but there's significant liability under the accountant provisions. That is something that one needs to be aware of.

 

This webinar was co-hosted with MCG Consulting

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