Umair Haque / Bubblegeneration
umair haque  


Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Monday, July 18, 2005

The Bribery Gap -

Required certification of internal controls over financial reporting is especially meaningful to a company facing a decision whether to report any improper payments. The Public Company Accounting Oversight Board's Audit Standard 2, issued in connection with Section 404, says a company's internal controls must provide "reasonable assurance" that payments and receipts are authorized by management and the board.

Standard 2 provides a "direct connection between Sarbanes-Oxley and the FCPA," says Jonny Frank, New York-based head of the fraud risks and controls practice at PricewaterhouseCoopers. That means that a bribe payment, as described by the FCPA, also represents a breach of a company's controls over unauthorized payments.

In other words, says attorney Atkinson, "if someone has been able to pay a bribe, your internal-controls system has failed."

The unintended consequence of Sarbanes-Oxley is more transparency enforced upon US-listed corporations. An interesting, if somewhat accidental, legal innovation.

-- Mahashunyam // 1:27 AM // 0 comments


Recent Tweets


    uhaque (dot) mba2003 (at) london (dot) edu


    atom feed

    technorati profile

    blog archives