Bribery and Corruption: The COSO Framework, FCPA, and U.K. Bribery Act

63 Pages Posted: 6 Sep 2018 Last revised: 19 Oct 2018

See all articles by Lawrence J. Trautman

Lawrence J. Trautman

Western Carolina University - College of Business

Joanna Kimbell

West Texas A&M University - College of Business

Date Written: September 14, 2018

Abstract

Long-established major U.S. corporations such as McDonalds, Walmart, and Proctor and Gamble continue to derive a majority of revenues from foreign operations. In addition, a number of relatively new U.S. technology companies such as: Airbnb (2008); Facebook (2004); Snap (2011); Twitter (2006); and Uber (2009), find themselves deep into international markets, often within just a few years of creation, and certainly by the end of their first decade of operation. Increased international commerce results in the potential for greater exposure to global demands for bribery. Bribery and corruption remains a cancer eating away at the ability of nation states to provide for their citizens. Corrupt payments siphons off funds that might otherwise be used to: provide housing; feed the hungry; fight poverty, illness and disease; and educate the masses.

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) Enterprise Risk Management (ERM) Framework offers a valuable tool in the anti-fraud struggle and in FCPA and UK Bribery Act compliance. COSO’s 2017 update to the Enterprise Risk Management ̶ Integrated Framework addresses developments during recent years in integrating risk with strategy into the ERM process. Our paper proceeds in eight parts. First, we discuss the bribery and corruption problem. Second, a discussion of the Foreign Corrupt Practices Act (FCPA) is presented. Third, we describe the U.K. Bribery Act. Fourth, we discuss the development and evolution of the COSO ERM Framework. Fifth, we apply the COSO ERM Framework as an anti-fraud strategy to assist in compliance with the FCPA and UK Bribery Act. Sixth, we discuss the application of Deferred Prosecution Agreements to the FCPA and their relevance to COSO ERM. Next, we explore the likely changes in FCPA enforcement under the Trump Administration. We believe this paper contributes to the bribery and corruption literature by exploring the potential benefits of the COSO framework.

Keywords: Anti-Fraud Skills, Audit, Bribery, Corporate Governance, Corruption, COSO Framework, Criminal Law, Deferred Prosecution Agreements (DPAs), Enterprise Risk Management, ERM, Ethics, Extortion, FCPA, Foreign Corrupt Practices Act (FCPA), Ransomware, Risk Management, Rule of Law, SONY Data Hack

JEL Classification: F10, F15, G18, G38, K1, K22, K33, K42, L14, L21, M14, N7, O17, O38, O39, P16, P21, P31, P52

Suggested Citation

Trautman, Lawrence J. and Kimbell, Joanna, Bribery and Corruption: The COSO Framework, FCPA, and U.K. Bribery Act (September 14, 2018). Florida Journal of International Law, Vol. 30, No. 3, 2018. Available at SSRN: https://ssrn.com/abstract=3239193 or http://dx.doi.org/10.2139/ssrn.3239193

Lawrence J. Trautman (Contact Author)

Western Carolina University - College of Business ( email )

204 Forsyth
Cullowhee, NC 28723
United States
828-227-2642 (Phone)

Joanna Kimbell

West Texas A&M University - College of Business ( email )

WTAMU Box 60809
Canyon, 79016-0001
United States

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