During investigation of Watergate scandal, SEC found about 400 businesses paid about $300 million as bribery or kickbacks in order to stop such bribes and corruption FPCA in 1977 was enacted as federal law. Two provisions to FPCA ( Foreign Corrupt Practices Act )are as follows:-
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- Anti-bribery provision that is enforced by the department of justice that prohibits any US official or resident or any person from paying or receiving the bribes or kickbacks either directly indirectly or through intermediaries.
- The accounting provisions enforced by SEC ( Securities and Exchange Commission) that focuses on preparation of accurate books and maintenance of financial records and transactions. Provision requires a robust system of internal controls that ensures the effectiveness of financial statement and true value and disposition of organizational assets.