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NCJRS Abstract

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NCJ Number: 64655 Find in a Library
Title: ACCOUNTING STANDARDS PROVISIONS OF THE FOREIGN CORRUPT PRACTICES ACT OF 1977
Journal: MAGAZINE OF BANK ADMINISTRATION  Volume:55  Issue:3  Dated:(MARCH 1979)  Pages:24-27
Author(s): D J O'REILLY
Corporate Author: Bank Admin Institute
United States of America
Date Published: 1979
Page Count: 4
Sponsoring Agency: Bank Admin Institute
Rolling Meadows, IL 60068
Format: Article
Language: English
Country: United States of America
Annotation: THE IMPACT OF THE 1977 FOREIGN CORRUPT PRACTICES ACT ON BANKS' AND BANK HOLDING COMPANIES' INTERNAL ACCOUNTING SYSTEMS IS EXAMINED.
Abstract: ALTHOUGH BANKS HAVE NOT EXPERIENCED PROBLEMS WITH FOREIGN BRIBERY, MANY WILL HAVE TO COMPLY WITH ACCOUNTING STANDARDS REQUIRED BY THE FOREIGN CORRUPT PRACTICES ACT. MANAGEMENT MUST DEVISE A COST-EFFECTIVE SYSTEM THAT MEETS THE ASSOCIATION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' (AICPA'S) OBJECTIVES CONCERNING PROPER AUTHORIZATION FOR FINANCIAL TRANSACTIONS, AUTHORIZED ACCESS TO ASSETS, MAINTENANCE OF FINANCIAL RECORDS, AND RECORDED ACCOUNTABILITY FOR ASSETS. INDEPENDENT AUDITS WILL NOT ALWAYS REVEAL WEAKNESSES IN INTERNAL ACCOUNTING CONTROLS; THUS, THE INTERNAL AUDITOR IS PRIMARILY RESPONSIBLE FOR ASSESSING THE SYSTEM. A SPECIAL AICPA COMMITTEE IS WORKING ON CRITERIA FOR EVALUATING INTERNAL CONTROLS SINCE PRESENT STANDARDS ON MATERIAL WEAKNESS DO NOT RELATE TO THE PROVISIONS OF THE ACT. THE INTERNAL AUDITOR USUALLY BEGINS AN INVESTIGATION BY DOCUMENTING ALL ASPECTS OF THE ACCOUNTING SYSTEM, INCLUDING FLOW CHARTS OF PERSONS AND AUTHORIZATIONS INVOLVED IN EACH TYPE OF TRANSACTION. THE AUDITOR MUST DETERMINE WHETHER THE SYSTEM LIMITS ACCESS TO ASSETS TO PERSONS AUTHORIZED BY MANAGEMENT AND PROVIDES FOR PERIODIC COMPARISON OF ACCOUNTS WITH ASSETS. TESTING FOR COMPLIANCE IS PERFORMED TO DETERMINE IF EMPLOYEES UNDERSTAND THEIR RESPONSIBILITIES AND ARE FOLLOWING CORRECT PROCEDURES. THE INTERNAL AUDITOR SHOULD ALSO EVALUATE THE ACCURACY OF THE ACCOUNTING RECORDS TO INSURE THAT THE BANK OR BANK HOLDING COMPANY IS COMPLYING WITH THESE REQUIREMENTS. EVERY AUDITOR SHOULD REEXAMINE THE BANK'S CONTROL SYSTEMS AND ACCOUNTING RECORDS AND DEVELOP IMPROVED METHODS FOR EVALUATION. (MJM)
Index Term(s): Financial institutions; Financial management; Records
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http://www.ncjrs.gov/App/publications/abstract.aspx?ID=64655

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