Books and Records Provisions

The Future Implications for Australian Businesses Operating Overseas

Global Risk and Investigations Practice

July 31, 2015

Recent enforcement actions and fines from the U.S. Securities and Enforcement Commission (“SEC”) have not always been levied pursuant to actual alleged bribery and have in some cases been ‘books and records’ violations. Against this backdrop, FTI Consulting examine U.S. provisions as well as the emerging legal and regulatory environment in Australia which may mirror such provisions in the future.

Australia is exploring options to introduce a new false accounting offence to complement existing provisions to detect, deter and prosecute acts of foreign bribery. In Australia at the moment, the situation appears to be that directors of companies found to be engaged in false accounting may only be liable for sanctions (such as disqualification) under the Corporations Act, misdemeanor or summary offences under relevant State or Territory accounting offences.

Recent proceedings pursued by the SEC against a number of multinational corporations highlight a number of important aspects surrounding the US Exchange Act ‘books and records’ provisions. In some cases the violations pressed by the SEC have arisen for example because of companies not accurately reflecting relationships concerning entertainment and hospitality expenses, or where internal accounting or authorisation controls for monitoring on-going relationships have been deficient.


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