The Foreign Corrupt Practices Act

In today’s ever changing and competitive modern world of business, it is critical for the companies to have activities internationally. In order to prohibit frauds and illegal activities, several acts and documents have been elaborated. One of the documents is Foreign Corrupt Practices Act that has been enacted in the 1970’s, as a result of SEC investigation of several U.S. companies that made illegal payments to foreign governmental officials, politicians, and political parties (Barnes 73). The FCPA had a critical impact on the way U.S. firms do business. Companies that did not comply with FCPA have been subject of criminal and civil enforcement actions that later resulted in huge fines and sentences for

Fraudulent financial reporting is one form of corporate corruption and may involve the manipulation of the documents used to record accounting transactions, the misrepresentation of accounting events or transactions, or the intentional misapplication of Generally Accepted Accounting Principles (GAAP) (Crumbley, Heitger, and Smith, 2013). Examples of fraudulent schemes befitting of this category abound and usually involve financial statement items that have been misclassified, omitted, overstated, undervalued, or prematurely recognized. One case involving CEO Bill Smith of Moonstay

According to Benston (1977) an unaware public pays for government-required accounting disclosure. Sunstein (1999) claims that disclosure of information allows the federal government to control public and private conduct. Foreign Corrupt Practices Act Over the decades accounting regulations have come from various sources. The Securities and Exchange Commission as well as the Internal Revenue Service and Interstate Commerce Commission are examples of regulatory bodies that promulgate accounting regulations. A more recent example occurred during the 1970s. During the Watergate era there were a number of investigations, some of which affected American business. One of the investigations, conducted by the Securities and Exchange Commission (SEC) in 1975, revealed that 19 publiclyheld corporations had made illegal campaign contributions and that these contributions were made from cash accounts that had not been recorded on the corporation’s books. (Heldack, 1977) This prompted the SEC to launch an investigation into what were considered ―questionable payments.‖ What came out of the investigation was that many U.S. multinational corporations were making hundreds of millions of dollars in ―questionable payments‖ to foreign officials to obtain business. As a result, the Foreign Corrupt Practices Act (FCPA) was unanimously adopted by Congress in 1977. Bribery of foreign officials to obtain business for the corporation

Bribery weakens competition and diminishes free trade which can affect companies, shareholders, and stakeholders. Jacob Franklin knowingly extended bribes to governments and contractors while knowing it was against company policy. Jacob engaged in bribery even though he knew it was wrong because he was advised that it was common practice at Richard Drilling. “In 1977, President Carter signed the Foreign Corrupt Practices Act (FCPA). The law made it illegal to bribe foreign officials. The maximum punishments for violators were set at $100,000 and 5 years in jail. Companies can be fined millions” (Bredeson, 2012, p.301). Not only was extending the bribe against company policy, it was against law and could cost Jacob and Richardson Drilling money and freedom.

In 1977, Congress passed the Foreign Corrupt Practices Act (FCPA), which makes it unlawful for U.S. businesspersons or companies to pay, with money or anything else of value, to foreign officials to secure beneficial contracts. The anti-bribery requirements of the FCPA have applied to all U.S. persons since 1977. In 1998, certain amendments were revised and the anti-bribery requirements now apply to foreign firms and persons who cause an act in continuance of bribery within the United States. The government was attempting to restricted illegal behavior, which is why they implemented the Foreign Corrupt Practices Act after the SEC discovered that over 400 companies were sending corrupt payments to foreign government officials and

The Foreign Corrupt Practices Act of 1977- is a U.S. Federal Law that prohibits any U.S. citizen from bribing a foreign official for the purpose of obtaining

Corruption is something that can hit businesses very hard. Foreign corruption used to be something that would hurt businesses majorly. Due to this The Foreign Corrupt Policies Act (FPCA) was signed into law on December 19, 1977 by President Jimmy Carter.

Many companies are trying to expand economically in the market by doing business with an individual or another company in foreign countries. These businesses are engaging in into using improper ways of payments that are leading to secret bribes to the foreign public officials. Foreign countries are not always in compliance with the laws and they tend not to follow them. Having these problems with the US and all the millions of dollars that have been passed they wanted to take a more affirmative approach and be able to correct the problem. That is when congress decided to introduce the Foreign Corrupt Practices Act to prosecute foreign companies for corrupt payments within the United States. The Foreign Corrupt Practices Act is a federal

Since 1977, the anti-bribery provisions of the FCPA have applied to all U.S. persons and certain foreign issuers of securities. With the enactment of certain amendments in 1998, the anti-bribery provisions of the FCPA now also apply to foreign firms and persons who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place within the territory of the United States.

While reading this case analysis, The Foreign Corrupt Practices Act came into discussion as an underlying factor in Weihardt’s decision. The Foreign Corrupt Practices Act was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. This practice applies to Weinhardt in the fact that he was given the opportunity to give Lee a bribe to obtain Lees’ business.

Yes, I think that the payments outlined on pages 12 and 13 should be considered corrupt practices because of the way they were registered in the company’s books -it was in compliance with the FCPA because of the anti-bribery provision and the books and records provision.

To find (event(s) or object(s) that prove something) of increased Government enforcement against (related to jobs where people mostly use an education and brains to earn money) crimes one needs only to look the Government's enforcement under the Foreign Corrupt Practices Act (FCPA). The Department of Justice (DOJ) and the U.S. Securities Exchange Commission (SEC) have really increased its enforcement of the FCPA over the past few years. In the past four years DOJ has brought 44 corporation FCPA enforcement actions and collected nearly $1.8 billion in criminal fines. But FCPA violations is not the only type of (related to jobs where people mostly use an education and brains to earn money) crime. The list is long and complex, but includes crimes

AICPA Code of Professional Conduct principles prevents vises such as fraud that are experienced in accountancy field. Audit is the best measure of the effect of the fraud that are imposed to investors by accountants. The relationship of the investors and account holders are supposed to be affirmed through auditing to ensure accounting principles are upheld(Weirich, Pearson, & Churyk, 2010). Improper loss of the funds through propagation of the accountant officer should be treated as fraud and criminal activity that should lead to prosecution. Therefore, the paper seeks to relate two fraud cases that have been audited and presenting AICPA Code of

Exhibits 4 and 5 are likely to help stop future foreign corrupt practices. To have a set of rules and expectations such as in Exhibit 4, the due diligence procedures, helps by leaving a paper trail. It is important to document the process of hiring a new agent, to make sure that you are complying with the FCPA. Exhibit 5 is also helpful because it is a reference point for anyone who may not be familiar with corruption in international business. To have a set of red flags that can be referenced, it can reduce employees just looking the other way and claiming they were not aware of the potential for corruption during a business deal. While neither of these will stop every occurrence of corrupt practices, having them in place will cause employees to think twice about engaging in such practices. If there is a standard for everyone to follow, it will also be easier to catch those that still decide to intentionally engage in foreign corrupt practices because they will be unable to say they did not know what was happening.

Leslie Wayne states that ‘as business has gone global, so has graft, particularly as companies in rich nations push into poorer regions’. The World Bank estimates that about $1 trillion in bribes is paid annually to government officials. Jeffrey M. Kaplan, a U.S lawyer who specialises in cases brought under the Foreign Corrupt Act, comments that ‘you are talking about millions of dollars going to dictators who are selling their national patrimony in countries where you cannot even get clean water’. Kaplan argues, ‘bribery is endemic to the human condition. If it cannot be rooted out, then you need to do something, and the FCPA, is that’. This underscores why proper