...2012 Mr. James Blevins Learning Team Reflection This learning team reflection will discuss the compliance issues associated with the Foreign Corrupt Practice Act of 1977 (FCPA). What is Foreign Corrupt Practice Act? For those who don’t know might ask, well, the Foreign Corrupt Practice Act of 1977 which was introduced in the U.S Senate as S.303 by Mr. William Proxmire (D.W) and signed into law by president Jimmy Carter on December 19, 1977 is a United States Federal Law known primarily for two of its main provisions. One that addresses accounting transparency requirements under the Securities Exchange Act of 1934 and another one concerning bribery of foreign officials. The anti-bribery provision of the FCPA prohibits any person from making use of interstate commerce corruptly, in furtherance of an offer or payment of anything of value to a foreign official, Foreign Political Party, or Candidate for political office, for the purpose of influencing any act of that foreign official in violation of the duty of that of that official, or to secure any improper advantage in order to obtain or retain business. ("Wikipedia") The “Foreign Corrupt Practice Act” protects “American Values” it shields us from the rampant corrupt practices around the world. It holds us to the highest standards of ethics. As the U.S corporations venture into foreign markets they must keep in mind that what is against the law in U.S such as Bribery could be accepted or even are part of their culture...
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...FCPA PAPER The Foreign Corrupt Practices Act of 1977 (FCPA) evolved from investigations by the Office of the Special Prosecutor that provided evidence of illegal acts perpetrated by U.S. firms in foreign lands. More than 400 U.S. companies admitted to making questionable payments to various foreign governments and political parties as part of an amnesty program (U.S. Department of Justice http://www.usdoj.gov). Given the environment of the 1970s and the proliferation of white-collar crimes (e.g., insider trading, bribery, false financial statements, etc.), particularly the payments made to foreign officials by corporations, Congress felt obligated to introduce legislation that led to the act. Congress's objective was to restore confidence in the manner U.S. companies’ transacted business. The FCPA is unique. Throughout history, governments have had laws making it illegal for governmental officials to take a bribe. One basic provision of the FCPA is that it prohibits U.S. partnerships, companies, and organizations from not only giving payments but also offering or authorizing payments to foreign officials or political parties with the objective of encouraging or assuring business relationships. There are two types of bribery provisions. The first prohibits any bribes made directly by the U.S. company. The second prohibits any organization from knowingly arranging for a bribe through an intermediary. Many thought that the FCPA would place U.S. companies at a disadvantage in the...
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...Introduction Securities Acts of 1933 and 1934 • Brief History of the Securities Act of 1933 • Objectives of the Securities Act of 1933 • Summary of the Securities Act of 1933 • Necessity of the Securities Act of 1934 • Summary of the Securities Act of 1934 • Peat Marwick Fraud/Scandal The Foreign Corrupt Practices Act of 1977 • Brief History of the Foreign Corrupt Practices Act of 1977 • Summary of the Foreign Corrupt Practices Act of 1977 • Kellogg Brown & Root LLC Fraud/Scandal Sarbanes Oxley Act (SOX) • The Purpose of SOX • Summary of SOX • US Bank of Seattle Fraud/Scandal Conclusion Government Regulation in the Accounting Industry The Great Depression and the Crash of 1929 led the United States into the beginning of new regulations. The first of these regulations was the Securities Act of 1933, which had a goal of prohibiting deceit, misrepresentation, and fraud in the sale of securities. The abusive practices of many banks and Wall Street firms resulted in the creation of the Securities and Exchange Commission (SEC) in 1934. It was established by The Securities Act of 1934 and gave the SEC power to monitor the sale of securities in the U.S. As a result of SEC investigations in the 1970's, it was discovered that many businesses were making payments to foreign officials for the purpose of obtaining or retaining business with them. Therefore, Congress enacted the Foreign Corrupt Practices Act of 1977 (FCPA) to stop the bribery of foreign officials and to restore...
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...Michael Wheeler and Jeffery Stewart LAW/531 June 16, 2013 Erikka Hise The Foreign Corrupt Practices Act This assignment instructed us to read four articles concerning Legal Issues in International and Domestic Business Foreign Corrupt Practices Act. Within this assignment it discussed the crisis in corporation’s unethical practices. The Foreign Corrupt Practices Act of 1977 sparked the argument that United States companies are disadvantaged in international markets. The act has been controversial since its enactment, with some critics attacking it as ineffective and the American business community complaining that it places U.S. enterprises at a competitive disadvantage abroad. Since the late 1990s, however, it has become a model for international efforts to stamp out corruption and improve the business climate in the developing world. Civil lawsuits are another risk from poor FCPA compliance. Typically those claims are securities class-action lawsuits or shareholder derivative lawsuits, where plaintiffs argue that the FCPA problem (Klein & Aguilar, 2010). Nevertheless, in recent years FPCP had serious fraud litigations because some companies in other countries do not go by the FPCP. The Foreign Corrupt Practices Act Program Compliance professionals should conduct a regular internal control check on his or her Foreign Corrupt Practices Act program. The current program in place only works if it is properly implemented and daily monitored...
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...The Foreign Corrupt Practices Act The Foreign Corrupt Practices Act (FCPA) of 1977 and the corresponding amendments set forth by the Omnibus Trade and Competitiveness Act of 1988 and Amendments of 1998 have tremendous ramifications for U.S. multinational companies at large, their subsidiaries, and foreign partners. While the main purpose of the original policy was to make it “unlawful to bribe foreign government officials to obtain or retain business”, the many statutes, their exceptions, and enforcement have gone through several iterations and most recently expanded jurisdiction of the law to non-U.S. territories. In bribery cases, several conditions involving the perpetrator, intent of the act, and the recipient of the bribe, must be met by the “corrupt act” for a breach to be founded. Similar stipulations apply to illegal payments made to third parties, specifically if such payments are used to filter or launder monetary bribes for a government official. The penalties levied if such conditions are proven, however, serve as compelling deterrents against fraudulent acts in global business practices (US Dept. of Justice, Lay-Person’s Guide). The FCPA was passed unanimously in both chambers of Congress and subsequently signed into law by President Jimmy Carter in 1977. Many initiatives thenceforward have been undertaken to broaden global cognizance of its provisions for US multinational corporations and to increase compliance in international operations. To facilitate...
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...Enviromental Factors Paper Tamisha S. Lawrence MKT/421 June 28, 2012 Torrey Cloud Environmental Factors Paper In a matter of months, Team B has learned various aspects of marketing. First Team B had to select a marketing team that would have the interest of Augusta’s 19th Hole. The marketing team worked diligently to provide Team B with many creative ideas to help with the marketing success of Augusta’s 19th Hole. Augusta’s 19th is currently in the phase 3 of the marketing plan. Phase three is deals with the environmental factors that affect Augusta’s 19th Hole. The environment as a whole has a great effect on the establishment. Whether it is having clean air or clean landscaping, the environment indeed has a great effect on Augusta’s 19th Hole. This paper will analyze the influence of global economic interdependence and the effect on trade practices and agreements, examine the importance of demographics and physical infrastructure, and analyze the importance of cultural differences. Analyze the influence of Global Economic Interdependence and the Effect of Trade Practices and Agreements According to C.P. Chandrasekhar "Economic Interdependence And Instability In The Global Economy" (2005), “There is little disagreement among economists that economic integration and enhanced Interdependence have been the inevitable consequences of trade and financial liberalization since the late 1970s” One would think that the Augusta’s 19th Hole would not have an interest...
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...and getting away with it. There are plenty of regulations in place right now and no more are needed unless people are continuing to abuse the system and new ones need put into place. As long as everyone continues to do their job properly, there is no need for any more government regulation. Securities Acts of 1933 and 1934 The Securities Acts of 1933 and 1934 ensure that companies are not misleading in their financial statements that investors base their opinions on. If an investor sees any financial statement to a company, and believes they are in good shape and that they should invest in that company, the company is held liable for any loss the incur. The Securities Act of 1933 requires that before selling securities publicly, a company must register them first. Companies must go through the Securities Exchange Commission and file a registration statement. When they file, they must include their audited financial statements (Beatty & Samuelson, 2010). After this is done, a company may offer their securities on a public market for investors which may include doing an initial public offering (Louwers, Ramsay, Sinason, Strawser, & Thibodeau, 2011). The Securities Act of 1934 requires companies that are trading publicly to file an annual report that includes their audited financial statements and quarterly reports (Beatty & Samuelson, 2010). These companies are also required to have their financial statements audited by independent...
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...and growth of an organization. A global organization such as Target has to take into consideration these environmental factors to continue to grow outside the borders of the nation of origin. This paper will analyze global economic interdependence, the effect of trade practices and agreements, the influence of cultural differences, the effect of political systems, and the influence of international relations in relation to Target. This paper will also analyze the importance of demographics and physical infrastructure, the concepts of social responsibility, and the ethical and legal obligations of Target. An explanation of the effects of technology and the influence of the Foreign Corrupt Practices Act of 1977 as well as the influence of local, national, and international legislation on Target policies and practices, are included.("Environmental factors," 2012) Environmental Factors Although Target stores have only recently moved into a global market with the acquisition of properties in Canada, Target Corporation has been a global organization for decades. Target has multiple divisions operating in other nations throughout the world. India is home to the Target IT solutions, customer service, and technical support divisions. There are many offices throughout Europe and Asia that operate Target sourcing services division; Target sourcing is the division that locates and acquires new merchandise that will be sold at the retail stores in the United States. Diversity is...
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... * Economist say that bribery negatively impacts economic growth because it encourages rent seeking behavior (Bribery, 2015). * Rent seeking behavior refers to an “individual’s or corporation’s attempt to illicitly influence the open market in order to provide that individual or corporation with a disproportionate amount of wealth” (Bribery, 2015). * The United Nations reported that corruption costs governments about $1.6 trillion dollars every year. * Economists estimated, based on a poll done in 86 countries, that 1 in every 4 businesspersons worldwide, paid a bribe in the past year (Lawrence & Weber, 2014). * Legislation has been established in an attempt to combat bribery. * The US Foreign Corrupt Practices Act (FCPA) is considered to have the widest jurisdictional reach, being aggressively enforced, both nationally and worldwide (Ernst & Young, 2013). PRACTICE: * Bribery is found in almost all sectors of the global market (Lawrence & Weber, 2014). * An analysis of Transparency International’s Corruption Perception Index by a business scholar found that acceptance of bribes was more likely in countries with low per capita income, low salaries for government officials, and less variation in income distribution (Lawrence & Weber, 2014). * Some people believe that corruption is necessary, even beneficial, to global commerce (Lawrence & Weber, 2014). * According to a 2010...
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... Many acts have been created because of controversy and scandals that have and continue to happen in the U.S. These acts were introduced to prevent individuals and businesses from losing everything and to help the government to keep individuals and businesses safe from scams. Without these regulations there would be no standards and companies and corporations could do as they please. They also help to monitor the accounting of companies, keep the scandals at a minimum, and watch for trends so we don’t have another stock market crash. Too many people have lost everything when these types of disasters strike. Securities Acts of 1933 and 1934 The Securities Act of 1933 was enacted as a result of the stock market crash of 1929. It was the first major piece of federal legislation to apply to the sale of securities. The legislation was enacted as the need for more information within and about the securities markets was acknowledged. The 1933 Act was based on the idea that companies offering securities should provide potential investors with sufficient information about both the issuer and the securities to make an informed investment decision. The Securities Act of 1934 established the Securities and Exchange Commission (SEC). The 1934 Act also gives the SEC power to police the sale of securities in the U.S. This law prevents fraudulent activities of any kind. They deal with things, such as, insider trading, tender offers, and corporate reporting. The Foreign Corrupt...
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...economic interdependence and trade practices Global interdependence is mutual dependence at a global level. Wal-Mart maintains a simple and effective marketing strategy which it has managed to replicate globally. The Every Day Low Price (EDLP) is simple and eliminates unnecessary advertising trying to push sales, as Wal-Mart has successfully sold the concept to the customers, that it sells its products at the lowest prices, every day (Dutta, 2009). To provide commodities at low prices, Wal-Mart uses extensive foreign product importation. Its major trading partner is China, to which approximately 60 of its products are imported. Trade practices are methods of competition, operating policies, or business procedures common to members of a line of business or industry that may be formally adopted sometimes as a rule under government auspices. Wal-Mart has a policy to thoroughly check all regulatory requirements before attempting to import and export merchandise. They also have policies stating that documentation must be complete and accurate and internal controls must be established to ensure compliance with all regulatory requirements, including any record-keeping obligations. Wal-Mart has trade agreements with the Federal Trade Commission and all the countries it trades with. Importance of demographics and physical infrastructure Demographic information includes geographic area, age, income, race, gender, and education level. It also includes shopping habits, marital status, number...
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...deviation from an ideal. Corruption come in different styles and that include bribery and funds embezzlement. Corruption has been the number one menace in many countries of the world. It impacts countries in many ways, impacting economy and development in a negative way. Corruption tends to raise the cost of government and may lower the rate of infrastructure growth. Most importantly, corruption has a negative impact on capitalism and foreign investment in that; it changes the environment which in turns affects decisions and actions. Corruption causes discriminatory treatment along tribal, ethnic, race and class. It also impacts in decision making process. Multinational corporations (MNCs) may be unable to compete in certain countries due to dishonesty by government officials, dependent upon a system of graft and bribery to approve and facilitate permits and various company operations. Corruption may be at the highest levels of government, where government decisions regarding military equipment, civilian aircraft, infrastructure or broad policy decisions about industrial subsidies are made, based upon favoritism rather than ethical weighing of facts. Corruption may involve elected officials and politicians as well as nonelected officials. Corruption may be voluntary and petty, for instance, paying to expedite a building permit. It may be extorted, in which a licensing officer holds up a building permit until a bribe is pad. It can also be grander, in which a voluntary bribe is...
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...ethics take center stage as a major concern of the modern era. The primary problem of international business ethics lies in the fact that most cultures and nations hold entirely different standards of both law and ethics. In America, business ethics can be employed because, in general, the disagreement between what actions are ethical and what actions are unethical in a single culture will be lesser than the disagreement between two entirely different cultures with different values and cultural practices. As a result, one business might believe it is acting perfectly in accordance with international business ethics, while another would view that first business as acting in a completely unethical fashion. Many businesses adopt the policies of cultural relativism, in which they attempt to take on the business ethics exhibited by the nation in which the business is working a particular deal, as opposed to attempting to carry any of their own business ethics across cultural boundaries. However, this practice is not without its own flaws. For more information on the basic issues and problems facing any attempts to form coherent international business ethics codes, click the link. One of the biggest problems facing any international business code of ethics is that standards for employment practices are not constant...
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...Environmental Factors Carl Thompson MKT/421 December 17, 2013 Deborah Angus Coca Cola is a well-known company all around the world. Coca Cola was founded in 1892 by Asa Griggs Candler. The Company is currently headquartered in Atlanta, Georgia. The company invented the popular soft drink with a unique cola taste. Coca Cola also make different brands of soft drinks such as Nestle, Dr Pepper, Diet Coke, RC Cola, Sprite, Fanta, Minute Maid, PowerAde, and Dasani. The market of the company is in beverage, and has good positioning as one of the top beverages in the world. The drink is sold in stores, vending machines and restaurant around the world. Licensed Bottlers have contracts with the drink around the world. It is important to consider environmental factors because they can possibly affect marketing both domestically and global. Factors can include cultural differences, demographics, physical infrastructure, social responsibility, trade practices, and economic interdependence. Global Economic interdependence: Interdependence can help a company’s understand relationships of mutual dependence between life forms and elements. Global economic interdependence is when economies of different companies are joined together in the formation of world trade. Different companies are so closely linked that if one were to fail it can affect all. Member countries of involved in the trades are required by the World Trade Organization to regulate of goods that are imported. World trade...
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...government needs to make sure that the public’s interests are maintained and preserved. Being an accounting student, I have heard and read about regulation in the accounting industry numerous times. There have been many major accounting scandals in history that have lead to many different kinds of government regulation. The government regulations in accounting are mostly enacted to protect investors. From 2000 to 2002 there was an abundant number of large corporate accounting frauds, which led to the Sarbanes-Oxley Act of 2002. Previous regulations were efficient to a certain extent, but scandals still happened and more regulation seemed to always be needed. Even though the new SOX regulation seems powerful and efficient, I believe that there will always be a need for additional regulation in order to prevent future scandals. Securities Acts of 1933 and 1934 Summary of Regulation The stock market crash of 1929 resulted in the Securities Act of 1933. This act required that before a company an offer or sell securities in a public offering, they must register the securities with the Securities and Exchange Commission (SEC). The registration statement is used to notify the SEC that a sale of securities is pending and that the information needs to be disclosed to prospective buyers. This statement includes information about the issuer and its business, a description of the stock, the proposed use of the proceeds from the offering, and audited balance sheets and income statements...
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