In the culmination of an investigation that caused Granite Construction to restate three years of its financial results, the Securities and Exchange Commission charged the California-based contractor and a former executive with financial reporting fraud. Granite agreed to pay $12 million to settle the SEC’s charges against the company. The agency named Granite and former senior vice president Dale Swanberg in its Thursday announcement. It alleged Swanberg, who oversaw Granite’s heavy civil group, hid cost increases and manipulated profit margins in the flagging unit beginning in 2017. The alleged scheme unraveled in mid-2019 when several projects neared completion, and the recognition of increased costs could no longer be deferred.

A federal grand jury in Miami returned an indictment today charging a Venezuelan national for laundering the proceeds of substantially inflated procurement contracts obtained by making bribe payments to senior officials at Petropiar, a joint venture between Venezuela’s state-owned and state-controlled energy company and an American oil company.  According to the indictment, from at least 2015 through at least May 2019, Rixon Rafael Moreno Oropeza, 46, allegedly engaged in a scheme to obtain multimillion-dollar contracts from Petropiar by paying bribes to senior officials at Petropiar. Moreno allegedly agreed to pay a $1 million bribe to a senior official in the Venezuelan government to install another person as a high-ranking official in the procurement division of Petropiar.

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Following recent SEC filings that described previously unreported FCPA-related investigations, there are at least 100 confirmed ongoing investigations overall, with 20 new active investigations first disclosed since the start of 2020, according to data from FCPA Tracker. Here’s a breakdown of those 20 new investigations that are ongoing: Which industries? Four companies that disclosed new FCPA-related investigations since 1.1.2020 are from the oil and gas segment. Two are defense contractors, two are medical device makers, and two are from the telecommunications industry. There’s one pharmaceutical firm, a tobacco company, a life science firm, a car maker. a beverage company, one technology firm, and another from the renewable energy industry.

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Corporate governance refers to the relationship between key individuals of companies and the manner in which companies are controlled and directed. For a company to maintain good corporate governance it must have a sound legal, regulatory, and institutional framework on which to rely – in this respect governments, regulators, and pressure groups play a key role as stakeholders. When implementing good, transparent, responsible, and ethical corporate governance policies, a company would need to take into account legislation and regulation, self-regulatory arrangements, voluntary commitments, and accepted business practices. Companies are expected to maintain adequate financial resources, abide by all disclosure requirements applicable and ultimately cooperate with regulatory authorities and abide by all the applicable acts, rules, regulations, guidance notes and best practices.

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Balancing the Books: GAO Finds New Flaws with Federal

BY: JERRY MARKON

meritalk.com

AUG 19, 2022

The Government Accountability Office (GAO) is out with a new set of recommendations for how the U.S. government can better compile official financial statements – an issue the GAO has been raising with Federal officials for a quarter century with varying success. In a Management Report released on Aug. 16, GAO said it uncovered four new “internal control deficiencies” in the process that the Department of the Treasury, in coordination with the Office of Management and Budget (OMB), used to prepare the government’s fiscal year 2021 financial statements.

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Designed for busy in-house counsel, compliance professionals, and anti-corruption lawyers, this newsletter summarizes some of the most important international anti-corruption developments from the past month, with links to primary resources. This month we ask: Did a U.S. appellate court affirm a business executive’s conviction under the Foreign Corrupt Practices Act (FCPA) related to an alleged Russian bribery scheme? What were the conclusions of an independent review of the performance of the UK Serious Fraud Office (SFO) in a major foreign bribery prosecution? Which major South American country significantly revised the way it will evaluate corporate compliance programs? The answers to these questions and more are here in our July 2022 Top 10.

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The past few years have emphasized fundamental organizational changes brought on by the pandemic. Companies are being called to embrace the impacts of digital transformation, monitor rises in cyber risks, embrace ESG regulations and keep pace with shifts in talent dynamics. This adds to the audit committee’s responsibility to ensure that public disclosures and financial reporting are transparent, accurate and in compliance with regulations.

This article highlights eight areas of focus for audit committees in 2022.

First Thing First: Focus On Financial Reporting And Internal Control Risks

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Segregation of duties (SoD) is an internal control designed to prevent error and fraud by ensuring that at least two individuals are responsible for the separate parts of any task. SoD involves breaking down tasks that might reasonably be completed by a single individual into multiple tasks so that no one person is solely in control. Segregation of duties is also known as separation of duties and is an essential element of an enterprise control system. The idea is to assign different parts of a task or transaction to different people to prevent any one person from gaining sole or excessive control and then misusing that control for nefarious or unauthorized purposes, such as perpetrating fraud or embezzling company funds.

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Control Quotes:

"Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning." 

-Albert Einstein