Greasing the Wheels in Kazakhstan - FCPA Violations and Implementation of a Corporate Ethics and Anti-Corruption Compliance Program
Journal of Accounting Education, Vol. 32, Issue 1, 2014
Posted: 30 Jan 2015 Last revised: 10 Feb 2015
Date Written: March 1, 2014
This case discusses the Foreign Corrupt Practices Act (FCPA) violations of Texas-based Baker Hughes, in connection with its oil service operations in Kazakhstan. You will assume the position of a newly assigned audit committee member who is trying to understand Baker Hughes’ FCPA violations related to its Kazakhstan operations. Your investigation will involve the examination of the SEC court complaint, press releases, government and company publications and 10-K annual reports.
Baker Hughes’ FCPA experiences illustrate the corruption risks and difficulties that multinational corporations encounter in conducting international business. The subsequent creation of a new Baker Hughes Code of Conduct, FCPA Compliance Guide, and Anti-Corruption Compliance Program provide you with a view of the corporate governance policies that companies can implement to help avoid costly penalties and investigations.
Case questions address FCPA bribery, accounting and internal control provisions, 10-K filings, red flags indicating bribery (warning signs), and auditor’s responsibilities in uncovering illegal acts.
Keywords: FCPA, Bribery, Internal Control, Compliance
Suggested Citation: Suggested Citation