• Effective Audit Committee Guide

The Foreign Corrupt Practices Act (FCPA) of 1977, as amended, has been the recent focus of U.S. Department of Justice (DOJ) and SEC Enforcement and has resulted in significant risk and penalty/violation costs to companies, not to mention the exposure of directors to personal liability. The FCPA generally prohibits the practice of paying or offering to pay (directly or indirectly) money or anything of value to a foreign official to obtain or retain business. Violations under the FCPA can be broad-reaching and may result in significant fines and penalties with respect to anti-bribery provisions as well as to requirements for the maintenance of accurate books and records and the implementation of internal controls designed to prevent corrupt payments. For example, violations can result from:1

  • Improper payments made by U.S. companies and citizens that take place either within the U.S. OR wholly outside of the U.S.
  • “Payments” made in cash or anything of value (e.g., discounts, gifts, use of materials, facilities and equipment, entertainment, benefits, etc.)
  • Application of the FCPA’s anti-bribery provisions not only to issuers but to “domestic concerns” (i.e., any corporation, partnership, association, joint-stock company, business trust, unincorporated organization or sole proprietorship with a principal place of business in the U.S. or organized under U.S. law) as well
  • Making improper payments to obtain government licenses, registrations, special tax or custom treatment which allow a company to do business in a foreign country (i.e., broad application – not just limited to those activities that directly influence the acquisition or retention of government contracts)
  • Inappropriate activities conducted by third parties acting on behalf of the company that the company may be deemed to have (or deemed as should have had) knowledge of
  • False characterization of improper payments on a company’s books and records – this includes books or records ultimately consolidated for financial reporting purposes

Note: The DOJ has predicated jurisdiction and, thus, FCPA may apply to non-U.S. companies or concerns, including foreign corporations and foreign nationals, who commit any act in furtherance of a prohibited payment while in the territory of the U.S.

Best practices include the establishment of an FCPA compliance program which includes:
  • Understanding and complying with applicable anti-corruption laws and regulations
  • Performing due diligence on business relationships (individuals and entities)
  • Communicating a consistent “top-down, zero-tolerance” message on creating and maintaining a corruption-free business environment throughout the organization
  • Creating a comprehensive training program on anti-corruption policies and procedures to include:
    • regular reporting by management to the audit committee about the company’s compliance program
    • documented assessment of an organization’s compliance program to demonstrate that the audit committee is fulfilling its fiduciary responsibility
    • monitoring and regular updates to the program, as necessary
    • Responding to allegations of corrupt activities and investigating them in a timely and comprehensive manner

(1) Refer to the Foreign Corrupt Practices Act (FCPA) – Enforcement document “The FCPA Explained” available athttp://www.fcpaenforcement.com/explained/explianed.asp.

Benchmarking Tool



William Eisig Atlantic Managing Partner 703-336-1401
Laurie De Armond
Laurie De Armond Managing Partner and National Co-leader 703-336-1453
Adam Cole
Adam Cole Partner and National Leader 212-885-8327
Lee Klumpp
Lee Klumpp National Assurance Partner – Nonprofit & Government 703-336-1497
Tammy Ricciardella Technical Director 703-336-1531
Marc Berger - BDO Greater Washington, D.C.
Marc Berger National Director, Nonprofit Tax Services 703-336-1420
Patricia Duperron National Assurance Practice Director-Governmental 616-776-3692
Andrea Wilson - BDO McLean
Andrea Wilson Partner; Nonprofit & Education Advisory Services Leader 703-752-2784
Susan Friend
Susan Friend National Assurance Director - Nonprofit & Government 954-626-2964
See all contacts

Nonprofit Standard Newsletter


We Wrote The Book


How to Read Nonprofit Financial Statements: A Practical Guide is a key resource that will help you read, interpret, and use nonprofit financial statements.

Video Series: Nonprofit Voices


Benchmarking Tool



June 25, 2019
BDO and representatives from the State of New York and State of New Jersey unclaimed property departments will be co-hosting a webinar on the various reporting requirements, amnesty programs, and audit practices for several states in the Northeast region.
June 25, 2019
As management advisors and catalysts for improvement, internal auditors must understand the speed of business risks and deliver timely reports and recommendations that allow management to proactively respond. When internal auditors take too long to produce results, those results may come too late to be of use to management and erode stakeholder satisfaction.