Episode 27 — Internal Controls and Enforcement Risks
The FCPA includes a specific requirement that a public company maintain an adequate set of internal controls. A company’s compliance program is one component of a company’s internal controls. Sarbanes-Oxley expended and reinforced this important requirement.
The Department of Justice and the SEC have aggressively enforced the internal controls requirement. The SEC, in particular, has expansively enforced the internal controls requirement even where a failure to implement adequate controls or circumvention of controls was not coupled with evidence of bribery or fraud.
Given this situation, companies have to take more care in the design and implement their internal controls, recognizing that the controls themselves may be used by government prosecutors to charge companies and individuals who may circumvent the controls.
In this episode, Michael Volkov discusses the internal controls law, enforcement practices and describes a new approach to the crafting of a company’s internal controls.