Global Anti-Bribery Compliance: PCAOB Guidance

In terms of global anti-bribery compliance, attorneys, international lawyers, in-house counsel, accountants, consultants, and others providing advice, the guidance issued in October of 2011 by the Public Company Accounting Oversight Board (PCAOB) entitled “Audit Risks in Certain Emerging Markets” provides many useful insights.  Whether a company is subject to the FCPA, the FCPA’s accounting and record-keeping provisions, the UK Bribery Act, the internal control requirements for entities subject to the FSA’s jurisdiction, Canada’s CFPOA, or other similar regulatory regimes, the PCAOB’s guidance can be extremely helpful in designing, as well as evaluating, internal controls and compliance programs to address global anti-bribery compliance issues.

While the PCAOB’s guidance focuses on fraud and illegal acts in general that may have a bearing on financial statements, the factors identified are equally applicable with respect to improper payments.  Among these are the following factors:

  • A need for input from persons experienced in the regional and local customs, cultural norms, and business practices that may impact on a company’s corporate governance and business activities;
  • When advice is sought from more regional or local experts, attention needs to be given to ensuring the reputational integrity and competence of those from who advice is sought;
  • Oversight should not be delegated to more junior officials in higher-risk markets;
  • Adequate attention needs to be given to addressing language barriers;
  • Increased sensitivity to related-party transactions is required;
  • Greater reliance should be placed on third-party confirmations as opposed to management representations;
  • Inconsistent, vague, or implausible responses from management need to be explored; and
  • Conflicting or missing evidence necessitates special attention.
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