On February 10, 2025, an executive order was issued to pause enforcement of the Foreign Corrupt Practices Act (FCPA) while reviewing its alignment with U.S. economic and national security interests. The FCPA has historically been a cornerstone in preventing bribery and corruption in international business transactions. But what does this pause mean for accounting professionals, CFOs, and compliance officers?
Key Accounting & Internal Control Considerations:
✅ Internal Controls Remain a Legal Obligation
While enforcement is paused, the FCPA still requires companies to maintain adequate internal controls over financial reporting to prevent and detect bribery. U.S. firms should continue documenting transactions, maintaining audit trails, and enforcing anti-corruption policies. Weakening these measures could increase exposure to financial misstatements and regulatory scrutiny from the SEC.
✅ Increased SEC & Shareholder Scrutiny
The SEC retains enforcement power over accounting provisions of the FCPA, including improper financial reporting and failure to maintain effective internal controls. Publicly traded companies must ensure books and records accurately reflect transactions to avoid financial restatements or SEC penalties. Shareholder activism may also intensify in response to potential corporate governance risks.
✅ International & Third-Party Risks
Many countries have their own anti-corruption laws (e.g., the UK Bribery Act, EU anti-corruption directives), and multinational companies must remain compliant. Foreign regulators may step up enforcement against U.S. companies, especially in jurisdictions where anti-bribery compliance is strictly monitored. Additionally, third-party vendors, suppliers, and partners may introduce additional risks if they interpret this pause as a green light for relaxed compliance.
✅ Reputational & Ethical Considerations
Beyond legal compliance, accounting professionals play a key role in upholding ethical business practices. Organizations that scale back controls now could face long-term reputational damage, lost investor confidence, and weakened corporate governance structures.
What Should Accounting & Finance Teams Do?
📌 Maintain and document robust internal controls over financial transactions.
📌 Monitor third-party activities to mitigate risks from vendors, suppliers, and foreign subsidiaries.
📌 Reinforce anti-corruption policies through training, audits, and financial oversight.
📌 Stay informed on regulatory updates as global anti-bribery enforcement may shift.
🚀 Now is the time for finance and accounting leaders to double down on compliance, not relax it. Internal controls safeguard financial transparency, investor trust, and long-term business sustainability. Let’s continue to drive ethical financial leadership in uncertain regulatory environments.
Sources & References:
🔹 White House Executive Order on FCPA Enforcement Pause (Feb 10, 2025)
🔹 Baker Botts: Yes, Bribes Are Still Illegal and Other Takeaways from the FCPA Pause
🔹 Sidley Austin: U.S. DOJ Hits the Brakes on FCPA Enforcement
🔹 Financial Times: Trump is Taking a Sledgehammer to the Anti-Corruption Cause
🔹 Reuters: Trump’s Justice Department Hits the Brakes on Anti-Corruption Enforcement
🔹 AP News: With Firings and Lax Enforcement, Trump Moves to Dismantle Public Integrity Guardrails
#Accounting #InternalControls #FCPA #Compliance #CFO #RiskManagement #EthicalFinance
