Certified Fraud Examiner Practice 2025 - Free Practice Questions and Study Guide

The Foreign Corrupt Practices Act (FCPA) primarily aims to combat corruption in international business. Its two main provisions focus on prohibiting bribery of foreign officials and ensuring that companies maintain accurate books and records regarding their financial transactions.

The first provision specifically makes it illegal for U.S. companies and certain foreign companies to bribe foreign officials with the intent to obtain or retain business. This is crucial in creating a fair and transparent environment for international trade by penalizing corrupt practices that distort competition.

The second provision requires these entities to maintain accurate financial records and to have internal controls in place to ensure compliance with accounting standards, preventing misleading financial reporting. This accountability is designed to promote integrity in the financial practices of businesses, thereby encouraging ethical behavior.

Understanding the FCPA is critical for organizations engaged in global business as it dictates compliance and ethical guidelines that help protect against corporate fraud and corruption in dealings with foreign officials.