FCPA for Accountants: What the Foreign Corrupt Practices Act Covers

The US Foreign Corrupt Practices Act, usually shortened to the FCPA, is mainly known as a bribery law, but a large part of it is an accounting law. That is why it matters to accountants: one half of the Act bans bribing foreign officials, and the other half requires certain companies to keep accurate books and sound internal controls. This guide explains both halves in plain English, using the statute text and the US Department of Justice (DOJ) material we could read. It also sets out what we could not confirm, so you know where to take advice. It sits alongside our guide to US AML requirements for CPAs, because bribery and money laundering often travel together.

What the FCPA is, in short

According to the DOJ's FCPA page (last updated 18 August 2026), the anti-bribery provisions make it unlawful to corruptly offer, pay, promise or authorise anything of value to a foreign official to influence them, to induce a breach of duty, or to secure an improper advantage in obtaining or keeping business. The accounting provisions apply to companies with securities listed in the US and sit alongside the bribery ban. The DOJ and the US Securities and Exchange Commission (SEC) share enforcement, and the DOJ and SEC publish a joint Resource Guide, now in its second edition, that explains how they read the Act.

Who is covered

The DOJ says the anti-bribery rules have applied to US persons and certain foreign securities issuers since 1977, and that amendments in 1998 extended them to foreign firms and individuals who cause a corrupt act to take place within US territory. In the Resource Guide's terms, the Act reaches three groups: issuers (broadly, companies with US-listed securities or SEC reporting duties), domestic concerns (US citizens, residents and US-organised businesses), and certain other persons acting while in US territory. Whether a particular non-US firm or client falls inside one of those groups is a legal question. We do not answer it here, and you should take advice from a qualified lawyer if you are unsure.

The anti-bribery provisions

The Act defines a "foreign official" as any officer or employee of a foreign government, or of its departments, agencies or instrumentalities, or of a public international organisation, as well as anyone acting in an official capacity for them. The word "instrumentalities" matters in practice, because it brings in people who work for state-owned or state-controlled bodies. The DOJ's June 2025 guidelines (see below) specifically mention employees of state-owned entities.

The statute includes two affirmative defences for domestic concerns: a payment that was lawful under the written laws of the foreign country, and a reasonable, good-faith expense such as travel or lodging that is directly tied to promoting, demonstrating or explaining products or services, or to performing a contract. It also carves out "routine governmental action", such as processing visas, providing power or water, or scheduling inspections, but not any decision about whether to award or continue business. The Resource Guide adds that even a genuine facilitating payment can still breach the Act if it is not accurately recorded, which brings us to the accounting side.

The accounting provisions: books, records and internal controls

Under section 13(b)(2) of the Securities Exchange Act, as published in the US Code, issuers must keep books, records and accounts that fairly and accurately reflect their transactions and the disposition of their assets in reasonable detail. They must also maintain internal accounting controls that give reasonable assurance that:

• transactions are carried out only with management's authorisation;
• transactions are recorded so that financial statements can be prepared under accepted accounting principles and asset accountability is kept;
• access to assets is permitted only with management's authorisation; and
• recorded assets are compared with actual assets at reasonable intervals, with differences dealt with.

The statute defines "reasonable detail" and "reasonable assurance" as the level that would satisfy prudent officials in the conduct of their own affairs. It also says that failing to meet these requirements is not, in itself, a crime. Criminal liability arises where a person knowingly circumvents or fails to implement a system of internal accounting controls, or knowingly falsifies a covered book, record or account. For an issuer that holds 50 per cent or less of the voting power in another firm, the statute asks only for good-faith efforts to use its influence to encourage compliant controls.

For accountants, the practical message is that a bribe disguised as a "consulting fee" or "marketing expense" is both a bribery risk and a records problem. The Resource Guide notes that mischaracterised expenditure in the books may breach the accounting provisions and may also point to corrupt intent.

Third parties and red flags

A theme in the Resource Guide is that you cannot avoid liability by routing payments through an intermediary. The Act's knowledge standard covers conscious avoidance, so closing your eyes to obvious warning signs is risky. The Guide discusses red flags around third-party agents, and the US v. Kozeny case on conscious avoidance. Our suggestions, which are not DOJ guidance: review unusual agent fees, payments to offshore accounts, vague invoice descriptions and any intermediary with a link to a government decision-maker, and apply the same scrutiny you would use for a politically exposed person (see our guide to politically exposed persons).

Penalties as stated in the statute

The figures below are the statutory amounts in the US Code text we read (15 U.S.C. sections 78dd-2 and 78ff, via Cornell Law School's Legal Information Institute). They are not predictions of what a court or agency would impose, and we have not read the other sentencing provisions that can change the outcome.

• Domestic concerns and issuers, anti-bribery violations (entities): a criminal fine of up to $2,000,000 and a civil penalty of up to $10,000.
• Individuals acting for them: a wilful violation carries a fine of up to $100,000, up to five years in prison, or both. A non-wilful violation carries a civil penalty of up to $10,000. The company may not pay an individual's criminal fine.
• Wilful violations of the Exchange Act more generally (section 78ff(a)): up to $5,000,000 and 20 years for individuals, and up to $25,000,000 for entities.

The DOJ also notes that the Foreign Extortion Prevention Act, enacted in July 2024, makes it a crime for foreign officials to demand or accept corrupt payments, with penalties of up to 15 years' imprisonment and a fine of up to $250,000 or three times the value demanded.

The DOJ's June 2025 enforcement guidelines

A memorandum from the Deputy Attorney General dated 9 June 2025, addressed to the head of the Criminal Division, sets out guidelines for FCPA investigations and enforcement under Executive Order 14209. As we read it, prosecutors are directed to weigh four main factors: links to cartels and transnational criminal organisations; harm to the fair opportunities of specific, identifiable US companies; national security, including bribery involving critical infrastructure; and serious misconduct, meaning substantial bribes, sophisticated concealment, fraud or obstruction rather than routine business courtesies. The memo also directs a focus on individuals who engaged in criminal misconduct rather than attributing "nonspecific malfeasance" to corporate structures, and says enforcement will not target people or companies based on nationality. These are prosecutorial priorities. The statute we read above is unchanged by them.

What we could not confirm

• The Resource Guide's own chapters on the accounting provisions, penalties and compliance programmes were not retrievable in full, so we relied on the statute text for those topics.
• We did not read SEC enforcement releases, so this guide does not describe the SEC's current priorities.
• We did not confirm limitation periods or how other sentencing provisions interact with the figures above.

Frequently asked questions

Does the FCPA apply to accountants outside the US?

It can, depending on who the client is and where conduct occurs. The DOJ says the Act reaches foreign firms and individuals who cause a corrupt act within US territory, and issuers face the accounting provisions wherever they operate. Take legal advice on any specific case.

Is the FCPA an anti-money-laundering law?

No, it is an anti-bribery and accounting law. We discuss money laundering controls separately in our professional enablers guide.

Where can I build my knowledge of financial crime compliance?

Our CPD courses cover compliance topics for accountants and finance professionals.