The SEC knows that it has powerful enforcement tools. The FCPA provides two important requirements on issuers – keep accurate books and records and maintain internal controls to ensure that management’s accounting controls operate effectively to ensure proper use of corporate assets. The SEC knows these are broad requirements and has defined practical requirements.  

One critical area of focus has been the SEC’s focus on contract-invoice-payment process.  For compliance professionals, this should be an area of high priority.  Chief compliance officers have to work closely with procurement, payables, sales and other functions that touch these important procedures.  CCOs have to work together to pull apart the process, understand the steps involved, and then build controls surrounding these activities.

In this Episode, Michael Volkov reviews the importance of contract/purchase order to invoice to payment procedures.