Accounting Provisions of Foreign Corrupt Practices Act
The SEC prosecutes violations of the accounting provisions of the Foreign Corrupt Practices Act which are record-keeping provisions which only apply to publicly traded companies and were established as part of the Sarbanes Oxley Act in response to the proliferation of accounting scandals to ensure that publicly traded companies establish and maintain accurate books and records.
The accounting provisions apply to:
- Companies whose securities trade on a national securities exchange in the United States
- Foreign issuers with exchange-traded American Depository Receipts
- Companies whose stock trades in the over-the-counter market in the United States and which file periodic reports with the Commission, such as annual and quarterly reports
The FCPA has two related accounting requirements which are enforced by the Securities and Exchange Commission: (1) books and records; and (2) internal controls. Unlike the anti-bribery provisions, the violation generally occurs because a company fails to report or inaccurately reports a bribe.
The “books and records” provisions require a company to make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company.
The internal controls provision requires that issuers devise and maintain reasonable internal accounting controls aimed at preventing and detecting FCPA violations.
Andrew S Feldman and the Firm have significant experience representing foreign nationals under investigation or accused of violations of foreign bribery and Foreign Corrupt Practices Act violations. please do not hesitate to contact the Firm.