Reference no: EM131155119

This article discusses the Foreign Corrupt Practices Act. Cultural differences may create a dilemma by US companies that operate in a global market.  There may be a conflict between what is an acceptable business practice in one country and what may be an illegal practice under US law.  A good example of a law that many argue may significantly hinder American companies that operate in foreign countries is the Foreign Corrupt Practices Act of 1977.   This Act deals with the payment to government officials in the form of bribes and how these payments are recorded on a company's books.  Typically,  these payments were not recorded or inaccurately described.  Hence, the accounting aspect of this Act.  The FCPA makes it a crime to bribe foreign officials as well as making misleading statements in a company's books.  This Act prohibits the bribery of foreign officials by American companies.  This applies to American companies that also operate in foreign countries.  Bribery may be a standard practice in countries.  It may be illegal but it may be such a common practice that it is overlooked and never enforced.  In some countries, bribery of this nature may not even be considered illegal.   As a result, an American company that is subject to this law may find itself in serious trouble for doing something that may be condoned by the country it is doing business in.  As a result, it has been argued that this has placed American companies at a significant disadvantage because it will or cannot legally "pay to play".  Other companies can bribe foreign officials with abandon to facilitate such things as the movement of goods, expediting regulatory approvals, etc. Imagine your company operates on a global scale and you need to move products in the most expeditious way as possible. What steps would you take from a corporate governance perspective to ensure that this law is adhered to on a global scale?