FACILITATING PAYMENTS MADE TO HASTEN SERVICES WERE CITED MOST FREQUENTLY IN COMPANY DISCLOSURES, FOLLOWED BY PRACTICES SUCH AS POLITICAL CONTRIBUTIONS BELIEVED NECESSARY TO OBTAIN OR RETAIN BUSINESS. MANY CORPORATIONS COULD NOT DETERMINE THE ULTIMATE RECIPIENT OF THE PAYMENT, AND APPROXIMATELY HALF THE PAYMENTS WERE MADE TO PERSONS ASSOCIATED WITH THE GOVERNMENT. QUESTIONABLE PAYMENTS WERE RECORDED IN ACCOUNTING RECORDS AS THE PAYMENT OF CASH, THE TRANSFER OF MERCHANDISE, GRANTING A PRICE REDUCTION, OR AS AN UNETHICAL BUSINESS PRACTICE SUCH AS REFUNDING AN OVERCHARGE TO A SWISS BANK ACCOUNT. OVER HALF THE SURVEYED COMPANIES HAD USED OUTSIDE BANK ACCOUNTANTS TO CONCEAL ILLEGAL ACTIVITIES. THE INHERENT LIMITATIONS OF THE AUDITING PROCESS REDUCE THE AUDITOR'S ABILITY TO DETECT IRREGULARITIES. METHODS OF TRANSACTING AND CONCEALING A QUESTIONABLE PAYMENT OR PRACTICE AND THE CONVENTIONAL AUDIT PROCEDURE THAT COULD DETECT THE ACTIVITY ARE DISCUSSED. ALTHOUGH AN AUDIT CANNOT UNCOVER OUTSIDE BANK ACCOUNTS, CERTAIN TYPES OF TRANSACTIONS MAY INDICATE THAT CASH IS BEING DIVERTED FROM REGULAR FUNDS. THE RESPONSIBILITY FOR PREVENTING QUESTIONABLE PAYMENTS LIES WITH MANAGEMENT AND ITS SUPPORT OF STRONG INTERNAL CONTROLS. TABLES SUMMARIZING SURVEY DATA ARE PROVIDED. (MJM)