Executive Roadmap to Fraud Prevention and Internal Control: Creating a Culture of Compliance, 2nd Edition

CHAPTER 15

Global Fraud and Corruption Risk1

EXECUTIVE SUMMARY

An organization's fraud and corruption risk does not end at the border of the United States. In many ways, it is even greater outside the country. This is especially true when a company has operations and employees based in foreign countries. The Foreign Corrupt Practices Act (FCPA), UK Bribery Act, and other laws that outlaw bribery of foreign government officials have significant penalties, both for individuals and companies. Knowing those risks and being able to appropriately respond to them are critical for successful and compliant business operations. An entity's compliance and ethics program must take into consideration the risk of fraud and corruption and institute internal controls, policy, training, and other critical program aspects.

GLOBAL CRACKDOWN

Like2 no time before, there is a growing global crackdown on bribery and corruption. The United States has been joined by other countries in this fight. There have been more investigations and prosecutions of both businesses and their employees in recent years than at any time in the past 30 years. “Crimes of official corruption threaten the integrity of the global marketplace and undermine the rule of law in the host countries,” said Lori Weinstein, the Justice Department prosecutor who oversaw the Siemens bribery case.3

Corruption and bribery are the insidious elements of the dark side of business. Illegal payments by public and private corporations to ...