The Foreign Corrupt Practices Act and the benefits of voluntary disclosure

Peter Leasure

Journal of Financial Crime, 2016, vol. 23, issue 4, 916-931

Abstract: Purpose - Various federal agencies have acknowledged that they would take voluntary disclosure of Foreign Corrupt Practices Act (FCPA) misconduct into account in assessing a transgressing company’s fines. However, several scholars questioned whether companies would actually receive that benefit. Previous research yielded the answer that companies do not get any benefit from voluntarily disclosing. The current study aims to revisit this area. Design/methodology/approach - The present study uses a census approach where all FCPA cases will be analyzed. The present study also uses added control variables and different statistical approaches in an effort to answer the question of whether there is a benefit to voluntary disclosure. Findings - The results here contradict previous findings and show that companies do actually receive a benefit to voluntary disclosure when the bribe promised or paid is under a certain amount. Once the bribe paid or promised surpasses this amount, the benefit to voluntary disclosure ceases. Practical implications - Findings provide insight to companies facing possible FCPA violations. Originality/value - Only one author attempted to answer the question of whether there was a benefit to voluntary disclosure. However, a subsequent study illuminated several flaws within that previous research. The current study is the first to provide a substantial answer to the question.

Keywords: FCPA; Voluntary disclosure (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-07-2015-0033

DOI: 10.1108/JFC-07-2015-0033

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