Question

Providing reasonable assurance with respect to which of the following is not required under the internal control provisions of the Foreign Corrupt Practices Act?

A) Management is responsibility for knowledge and authorization of transactions.
B) Transactions are recorded to maintain accountability for assets.
C) Access to assets is limited to members of management.
D) Transactions are recorded to permit the preparation of reliable financial statements.

Answer 1

The Foreign Corrupt Practices Act requires companies to have a system of internal controls for financial reporting and asset protection. Access to assets is controlled but not necessarily limited to management. The FCPA does not mandate that only members of management have asset access.

Step-by-step explanation:

Under the internal control provisions of the Foreign Corrupt Practices Act (FCPA), companies are generally required to maintain a system of internal controls that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. It also requires that transactions are executed in accordance with management's general or specific authorization, and that access to assets is controlled to prevent or detect unauthorized acquisition, use, or disposition of assets.

The option that is not required under the FCPA's internal control provisions is: C) Access to assets is limited to members of management. The Act does not specifically mandate that only members of management should have access to assets. Rather, it requires that access to assets is controlled and that the company must provide reasonable assurance that transactions are authorized and recorded correctly to permit the preparation of financial statements and to maintain accountability for assets.