Final: Business Ethics (Accounting) is the system of guidelines that cover a bro

Question

Final: Business Ethics (Accounting) is the system of guidelines that cover a broad range of topics, which leads to a more productive and ethical workplace. Business Professionals and corporations operate in a fair legal and moral fashion. In a five- page essay discuss why The Foreign Corrupt Practices Act of 1977 was created and why it be followed. Provide examples; how does it help in the globalized market place. Use topics such as; corporate governance, corporate social governance, fiduciary responsibilities, corruption, and philosophical approaches that are used to resolve ethical dilemmas arising from day to day business. When writing this paper remember what ethics was to you when you first started the course and what you have learned since you have been studying this topic /

Explanation / Answer

The Foreign corrupt Practices Act 1977 , Commonly known as FCPA is one of the stringest law present governing the corrupt practices present across the globe.

It was created to curb the corruption prevailing in corporate and social sector. Like favouring the companies or people by taking bribe/ some form of favour. I will also state some of examples from Case studies which will explain why this law is necessary and to be followed.

Basically there are two component of FCPA :-

Anti -Bribery Provisions :

- It states that if any person / foreign official take bribery to obtain/ retain the business or take commercial advantage.

-Prosecution will look To corrup intent as well.

Record Keeping and Accounting provisions:-

Companies need to maintain accurate books and records and an effective systems of internal controls.

Some of the key points of FCPA are as follows :-

Anything of value which includes, gifts, entertainments, meals, travel expenses, kickbacks, incentive payments system, Free products, donations, discounts, employments consultanices are prohibited.

Examples of potential violations :-

Paying a scientist in a state-owned laboratory or company to buy your product.
• Paying a customs official to allow ashipment of your product into a country without the proper permit or license
• Taking a foreign official to anextravagant dinner or providing a “free trip”
• Helping a relative of a foreign official get a lucrative job
• Taking a foreign official to lunch todiscuss potential business ventures and recording the expense as a “licensing fee” on your records

FCPA is not only applicable in US corporates or any local bodies it also applies to Employee working for US based corportaes. So it binds them as well ethically and legally.

There are heavies sanctions and fines for companies as well as invidiuals ranging from $2 Mn and $1,00,000 respectively. There is prison upto 5 years for Individual.

So binds them socialy , so they should not indlge in this unethical practices. Morally they should keep themselves high.

Apart from crimial and civil penalties the FCPA also may suffer collateral consequences like , Disqualification from doing business with Federal goverment, Ineligibility to get export licences, civil litigation, investigation costs, Business disruption etc.

So, to abide by this Contracts are mandatory. Due delligence is essential.

Illegal bribery schemes are often discovered through inaccurate or misleading recordkeeping.

Must keep detailed books, records and accounts, that farely and accurately reflect transactions and dispostions of company assets.

couple of FCPA charges faced by companies are:

Biomet paid $22 Mn to settle FCPA charges.

In 2011 , rockwell paid $2.8 mn charges to settle FCPA charges, including disgorgementand interest of $2.4 Mn and a civil penalty of $4,00,000.

For me Ethics was basically moral ethics. If you stick to your basics or dont indulge into corrupt practices. But post studying this , i learnt that only not indulging is not enough.

Keeping the records, maintaining books of accounts are as important. Also we should apply our due dillegence before entering into any venture or dealing with third parties.

We should be aware of what we are doing as ignorance is as good as indulging in corrupt practices.

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