Monday, June 9, 2008

Turning up the heat on FCPA, from Inside Counsel

Ever since my undergrad days at LSU in the mid-1980's, I've thought Internal Audit should report to General Counsel (GC) instead of the CFO. The GC is an advisor to the Board, and who better to provide advice, especially on matters of law and compliance. Because of this belief, I've subscribed to Inside Counsel, which is the equivalent trade magazine for in-house Legal Officers as CFO Magazine or CIO Magazine are for those executives.

This months' issue of Inside Counsel follows trends that we've been hearing throughout the internal audit world. Specifically, that enforcement of the Foreign Corrupt Practices Act (FCPA) is stepping up for large, global corporations, and that this increased focus leads to greater risk, especially those whose internal monitoring programs are judged to be sub-standard. To read the entire article, click through this link

Continuous auditing and monitoring, including monitoring of relationships between suppliers, customers, and employees is not frequent among the Global 1000. But many organizations that do such monitoring are often able to identify risky transactions or relationships well in advance of any regulators. Further, a couple of organizations who are among the leaders in continuous monitoring of FCPA have actually had to implement such programs because the monitoring has been forced upon them by regulators.

So if you're looking for one more reason to experiment with Continuous Auditing or Continuous Monitoring, see the following list of FCPA fines and payments, and ask what you're doing to make sure your organization stays off of this dubious list.

Siemen's $2 BILLION in bribes revealed, settlement pending
Baker Hughes $44 million in penalties paid (charges of bribery in Kazakhstan)
Chevron $30 million in penalties paid (Oil for Food Corruption in Iraq)
Volvo $7 million in penalties paid (Oil for Food Corruption in Iraq)
Flowserve $4 million in penalties paid (Oil for Food Corruption in Iraq)
Ingersoll-Rand $2.5 million in penalties paid (Oil for Food Corruption in Iraq)

As always, comments and suggestions are welcome.

Joe Oringel
Visual Risk IQ, LLC
Charlotte NC, USA

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