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FCPA Corporate Recordkeeping

The FCPA requires companies whose securities are listed in the United States to meet its accounting provisions. See 15 U.S.C. §  78m(b)(2). These accounting provisions, which were designed to operate in tandem with the antibribery provisions of the FCPA, require issuers to make and keep books and records that accurately and fairly reflect the transactions and dispositions of the assets of the corporation. In addition, such corporations must devise and maintain a system of internal accounting controls adequate to provide reasonable assurances that: (i) transactions are executed in accordance with management's authorization; (ii) transactions are recorded as necessary to enable preparation of financial statements in accordance with GAAP and to maintain accountability of assets; (iii) access to assets is permitted only in accordance with management's authorization; and (iv) the recorded accountability for assets is periodically compared with the existing assets and any differences are addressed. The issuer is also responsible for the books and records of subsidiaries over which it exercises control. However, a corporation holding 50% or less of the voting power with respect to a domestic or foreign subsidiary or affiliate must only attempt in good faith to use its influence to cause the firm's compliance with this section. See § 78m(b)(6). The willful circumvention of or failure to implement a system of internal accounting controls, or willful falsification of an issuer's books, records, or accounts in violation of section 78m is a criminal offense whether or not such falsification is related to a foreign corrupt practice proscribed by the FCPA. See § 78m(b)(5). [updated November 2000] [cited in USAM 9-47.100]