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The FCPA: Accounting Provisions THE FCPA: ACCOUNTING PROVISIONS In addition to the anti-bribery provisions, the FCPA contains accounting provi- sions applicable to public companies. The FCPA’s accounting provisions op- erate in tandem with the anti-bribery provisions" and prohibit off-the-books accounting. Company management and investors rely on a company’s financial statements and internal accounting controls to ensure transparency in the finan- cial health of the business, the risks undertaken, and the transactions between the company and its customers and business partners. The accounting provi- sions are designed to “strengthen the accuracy of the corporate books and records and the reliability of the audit process which constitute the foundations of our system of corporate disclosure.”” The accounting provisions consist of two primary components. First, under the “books and records” pro- vision, issuers must make and keep books, records, and accounts that, in reasonable detail, accurately and fairly reflect an issuer’s transactions and dispositions of an issu- er’s assets.” Second, under the “internal controls” provi- sion, issuers must devise and maintain a system of internal accounting controls sufficient to assure management’s con- trol, authority, and responsibility over the firm’s assets.”!4 These components, and other aspects of the accounting provisions, are discussed in greater detail below. Although the accounting provisions were originally enacted as part of the FCPA, they do not apply only to brib- ery-related violations. Rather, the accounting provisions ensure that all public companies account for all of their assets and liabilities accurately and in reasonable detail, and they form the backbone for most accounting fraud and issuer disclosure cases brought by DOJ and SEC” HOUSE_OVERSIGHT_022540