1. P. Kemezis and W Clasgall, 'ATexas Wildcatter Cashes in on French Oil," Busrhess W-eek,'tsllay' '1985, 106-10i.2. The dominant companies in the oil and gas industry include such firms as ExxonMobil and Conoco-Phillips. These firms are often referred to as the "majors' or simply as "Big Oil."

207

208 sEcTtoNTHREE INTERNALCournollssuas

of oil and gas exploration by employing a rough-andtumble business strategy. Leerecognized that the large domestic oil firms in the U.S. had already identified theprime drilling sites in this country. So, Lee decided that Triton should focus its explo-ration efforts in other oil-producing countries, particularly in regions of those coun-tries largely overlooked by "Big Oil." During Lee's tenure with Triton, the companylaunched exploration ventures in Argentina, Australia, Canada, Colombia, France,Indonesia, Malaysia, New Zealand, and Thailand.

In the early 1970s, Triton discovered a large oil and gas field in the Gulf of Thailand.Recurring disagreements and confrontations with the Thai government stymiedTriton from developing that field for more than l0 years. Lee's experience with theThai government taught him an important lesson: If Triton's exploration ventures*.re io be successful in foreign countries, the company had to foster good relation-ships with key governmental officials in those countries.

Lee created Triton Indonesia, Inc., a wholly owned subsidiary of Triton Energy, todevelop an oil field that the company acquired in Indonesia in 1988. This oil field,located on the island of Sumatra and known as the Enim Field, belonged to a Dutchfirm in the 1930s. At the time, Sumatra was a protectorate of the Netherlands. Whenthe Japanese invaded Indonesia during World War II, retreating Dutch soldiers dyna-mited the Enim Field to render it useless to Japan. Over the next four decades, thedense jungles of Sumatra reclaimed the oil field. In the mid-1980s, Lee learned ofthe potential oil reserves still buried in the Enim Field. A small Canadian companyowned the drilling rights for those reserves. Triton wrested control of the drillingrights from that company in a protracted legal battle. After investing several milliondollars and several years of hard work in the Enim Field, Triton began pumping thou-sands of barrels each day from the long dormant oil reservoir.

Triton's strategy of working closely with officials of the Indonesian government con-tributed greatly to the success of the Enim Field project. To strengthen Triton's ties tothose officials, the company hired a French citizen, Roland Siouffi, as a consultant.Siouffi, who had resided in Indonesia for nearly three decades, served as Triton'sliaison with Indonesian tax authorities and with governmental agencies that oversawthe country's oil and gas industrY.

In 1991, Triton struck black gold again, this time in Colombia. Several large firms haddrilled exploratory wells in the foothills of the Andes Mountains that stretch acrossColombia. Those wells came up dry. Nevertheless, geological reports convinced Leeand other Triton executives that the region contalned large but well-hidden oil reser-voirs. Lee and his colleagues were right. In 1991, Triton pinpointed huge oil and gasdeposits trapped in complex geologicalstructures lying beneath the Colombian iun-gles. These reservoirs were the largest discovered in the western hemisphere sincethe 1g68 Prudhoe Bay discovery in Alaska. Again, Triton established close workingrelationships with governmental officials, this time in Colombia, to develop the newoilfield.

On the strength of Triton's Indonesian and Colombian oii strikes, the company'sstock skied from a few dollars per share in the late 1980s to more than $50 per sharein 1991.3 Triton's common stock ranked as one of the 10 best performing stocks on theNew York Stock Exchange in 1991. Despite the company's obvious knack for findingoil, many Wall Street analysts refused to recommend Triton's common stock. Rumorsof the bribing of foreign officials, aliegations of creative accounting methods, and in-timations of other corporate wrongdoings soured these analysts on Triton. One Wall

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3. D. Calant. "The Home Runs of 1991," {nstitutional Inuestor, March 1992, 51-56'

cAsE 3.4 TruroN ENancy Lm.

Street portfolio manager succinctly summed up his view of Triton. "Bill Lee is not aguy I'd like to see running an oil company I had invested in.'a

The allegations of abusive management practices and creative accounting caughtup with Triton in the mid-1990s. Those allegations persuaded the U.S. Department ofJustice and the SEC to probe Triton's ties to government officials in foreign countries.The principal focus of this investigation was the relationships that Triton executiveshad cultivated with Indonesian officials during the development of the Enim Field.

The central issue addressed by federal authorities while investigating Triton waswhether the company had violated a seldom-enforced federalstatute, the ForeignCorrupt Practices Act of 1977 (FCPA). The FCPA was a by-product of the scandal-ridden Watergate era of the 1970s. During the Watergate investigations, the Office ofthe Special Prosecutor uncovered numerous bribes, kickbacks, and other paymentsmade by U.S. corporations to officials of foreign governments to initiate or maintainbusiness relationships. Widespread public disapproval compelled Congress to passthe FCPA, which criminalizes most such payments. The FCPA also requires U.S. com-panies to maintain internal controlsystems that provide reasonable assurance of dis-covering improper foreign payments.

The accounting prooisions [of the FCPA] uere enocted by Congress olong with tlte anti-bribery prouisions becouse Congress concluded thot almost oll bribery of foreign offi-ciols by Americon corporotions was couered up in the corporations' books ond thot therequirement for occurate records ond odequote internal controls would deter bribery.s

Exhibit I summarizes the FCPAs key anti-bribery and internal control requirements.

!j Rnti-eribery Provisions:i

Section 30 (A) of the Securities Exchange Act, the anti-bribery provision of the FCPA,prohibits any issuer . . . or any officer, director. emptoyee, or agent of an issuer from makinguse of instruments or interstate commerce corruptly to pay, offer to pay, promise to pay, orto authorize the payment of any money, gift, or promise to give, anything of value to anyforeign official for purposes of influencing any act or decision of such foreign officiaL in hisofficia[ capacity, or inducing such foreign officiat to do or omit to do any act in viotation ofthe lawful duty of such officiat, or inducing such foreign official to use his influence with aforeign government or instrumentatity thereof to affect or influence any act or decision ofsuch government or instrumentatity, in order to assist such jssuer in obtaining or retainingbusiness for or with, or directing business to, any person.

Recordkeeping and Internal Contro[ Provisions:

Section 13(bxz) of the Securities Exchange Act is comprised of two accounting provisionsreferred to as the "books and records" and "internal controts" provisions. These accountingprovisions were enacted as parl of the FCPA to strengthen the accuracy of records and to"promote the reliability and compteteness of financial information that issuers are required tofile with the Commission or disseminate to investors pursuant to the Securities ExchangeAct." Section 13(bX2XA) requires issuers to make and keep books, records, and accounts thataccurately and fairly reflect the transactions and dispositions of their assets. Section 13(bX2XB)requires issuers to devise and maintain a system of internal accounting controls sufficient

4. T. Mack, "Lucky Bill Lee," Forbes,14 October 1991,50.5. This quotation and the remaining quotations in this case, unless indicated otherwise, were drawnfrom the following source: Securities and Exchange Commission, Accounting and Auditing EnforcementReleose No.889, 27 February 1997.

209

EXHIBIT IKsy PRolrsroNsor tsr FonrrcxConnupr PnqcrrcrsAcr

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EXHIBII I-continued

Kry PRovtstoNsor rHs FoRucllCoRnupr PrucrtcssAcr

EXHIBIT 2

Ser-Ecre,o ExcERprsFROM THEINmnN.q.L AuoltMsr\4o RrclRDtNcOpr,RqroNs opTntrou IttooNlsl,q

SECTION THREE IN'TERNAL COI"TNOI ISSUTS

to provide reasonabte assurances that, among other things, transactions are executed inaccordance with management's general or specific authorization and that transactions arerecorded as necessary to permit presentation offinancial statements in conformity with GAAPand to maintain accountabitity for assets.

Source: Securities and Exchange Commission. Accounting and Auditing Enforcement Releose No. 889,

27 February 1997.

lndonesiqn ChorgesTriton Energy's former controller sued the company in 1991, claiming that he hadbeen fired in 1989 after refusing to sign off on the company's Form 10-K registrationstatement. The controller refused to sign off on the 1989 10-K because it failed to dis-close "bribery, kickbacks and payments to government offlcials, customs officials,auditors, inspectors and other persons in positions of responsibility in Indonesia,Columbia, and Argentina."6 The controller acknowledged that Triton's senior man-agement had not authorized the payments but insisted that the FCPA required suchpiyments to be disclosed in the company's 10-K. Before the case went to trial, Tritonttnciats dismissed the charges, suggesting that they were "totally without merit."7During the trial, considerable evidence surfaced supporting the controller's allega-tions. A memo written by Triton's former internal audit director contained the mostdamaging of this evidence.

In late 1989, Triton management sent the company's new internal audit directorto review and report on Triton Indonesia's operations. Upon returning, the internalaudit director filed a lengthy memorandum with severalTriton executives, includ-ing the company's president and at least two key vice presidents. Exhibit 2 presentsseiected excerpts from that memo. The memo documented extensive wrongdoing byemployees and officials of Triton Indonesia. At one point, the frustrated internal auditdirector complained that the subsidiary's accounting records were so misleading itwas impossible "to tell a realtransaction from one that has been faked."8 After read-ing the memo, the alarmed Triton executives ordered that all copies be collected anddeitroyed. Despite these lnstructions, one copy of the memo survived and became akey exhibit in the lawsuit filed against Triton by its former controller.

I "In indon.sia, I found mysetf in a country of state supported corruption'"i "I was totd that we pay between $t,000 and $1,900 per month just to get our invoice to: Pertamina [the state-owned Indonesjan oit company] paid."

, "We must pay peopl.e in customs in order to get our equipment off the dock so that it can be, used in operations."

. "Whrt is worse, and this is extremely confidential, is that we paid the auditors in order tor have their audit exceptions taken care of. . . . Ihis part is particularty bad to me' I had hoped: that at least the Indonesian auditors were honest."

Source: A. Zipser, "Crude Grab?" Barron's,25 l{ay 1'992,1?-75'

6. A. Zipser, "Crude Grab?" Borron's,25 May 1992, 15.

7. Mack, "Lucky Bill Lee."

8. A. Zipser, "Trials of Triton," Barron's,26 july 1993, 14-15.

1

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:;

CASE 3.4 TruroN EmsRcy Lro.

Another former Triton accountant also corroborated many of the former control-ler's allegations. This individual, who had previously served as a Price Waterhouseauditor, joined Triton Indonesia's accounting staff in early 1989. Almost immediately,the accountant discovered serious internal control deficiencies in the subsidiary's op-erations. Inadequate segregation of key accounting and control responsibilities cre-ated an environment in which individuals could easily perpetrate and then concealfraudulent transactions. The accountant's most serious charge regarding his formeremployer involved an admission made by his superior. The superior told the accoun-tant that auditors from Pertamina, the state-owned Indonesian oil firm, had been"bought" by Triton. Among other responsibilities, these auditors regularly reviewedTriton Indonesia's tax records. "l understood the words 'buy the audit' to mean bribePertamina auditors. To me, it represented an illegal transaction, the proposal of anillegal transaction."e

Co-workers reportedly shunned the accountant after he objected to such conduct.A few weeks later, the accountant resigned. Because he was concerned that his brieftenure with Triton Indonesia might blight his professional career, the accountant fileda 37-page report with the U.S. ernbassy in Indonesia. That report documented ques-tionable transactions, events, and circumstances he had encountered during his em-ployment with Triton Indonesia. In the report, the accountant described his formersuperiors as "unprincipled, unethical liars."10

Peat Marwick served as Triton Energy's audit firm over a span of more than twodecades beginning in 1969. During the planning phase for the l9g1 audit, peatMarwick learned of the memorandum written by Triton's former internal audit di-rector. A Peat Marwick auditor questioned client management concerning the un-lawful activities allegedly documented in that memo. Company officials convincedPeat Marwick that all copies of the memo had been destroyed. A Triton executivethen prepared a memo responding to Peat Marwick's inquiries. This second memoomitted many key details of questionable activities documented by the internalauditdirector. At a subsequent meeting with Peat Marwick representatives, Triton man-agement directly refuted the principal allegation reportedly included in the internalaudit memo. SeveralTriton officials told Peat Marwick that there was no evidenceTriton Indonesia officers or employees had bribed Indonesian auditors.ll

In the summer of 1992, the jury that heard the lawsuit filed by Triton's former con-troller ruled in his favor and awarded him a $124 million judgment. That judgmentranks as one of the largest wrongful termination awards ever handed down by a U.S.court.12 Following the trial, the surviving copy of the memo written by Triton'sformerinternal audit director became a road map for federal authorities to follow while in-vestigating Triton's abusive management and accounting practices.

"Dirty" PoymentsTriton Indonesia negotiated a contract with the Indonesian government for the rightto develop the Enim Field. This contract made the nation's state-owned oil company,

9. Zipser, "Crude Grab?"10. Ibid.,14.11. In 1992, Triton Energy retained Price Waterhouse to serve as its audit firm, replacing peat Marwick12. The judgment was subsequently reduced in a private, out-of-court settlement involving the formercontroller, Triton, and Triton's insurer. The former controller received approximately $10 million fromTriton and an undisclosed additional sum from Triton's insurer. Shortly before the jury verdict was an-nounced, the former controller had offered to settle the case for $5 million.

2',11

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212 SECTION THREE II.ITERNAL COI"ITROI- ISSUES

Pertamina, a partner in the project. The agreement gave the Triton subsidiary opera-tional and financial control over the joint venture but allowed Pertamina to review andoverride all-important decisions involving the project. Another feature of the agree-ment required Triton Indonesia to transport oil recovered from the Enim Field throughPertaminas pipelines. Finally, the agreement obligated Triton Indonesia to pay signifi-cant taxes to the Indonesian government on the basis of the Enim Field's production.

Two Indonesian audit teams periodically examined Triton Indonesias accountingand tax records. Pertamina auditors reviewed the accounting records to ensure thatthe Triton subsidiary complied with its contractual obligations to Pertamina. Auditorsfrom the Indonesian Ministry of Finance and Pertamina auditors inspected the tax re-cords to ensure that the proper taxes were being paid to the Indonesian government.The Ministry of Finance auditors were known as the "BPKP" auditors since they workedfor the agency'S audit branch , Badon Pengowoson Keuangan Don Pembangunln.

Pertamina and BPKP auditors concluded a joint tax audit of a Triton Indonesia oper-ating unit in May 1989. The audit revealed that the unit owed approximately $618,000of additional taxes. Of this total, $385,000 involved taxes levied by Pertamina auditors,while the remaining $233,000 were taxes assessed by BPKP auditors. Two officers ofTriton Indonesia discussed this matter with Roland Siouffi, the longtime Indonesianresident hired the year before to serve as a liaison with government officials. Siouffithen met with two key members of the Pertamina audit team. Siouffi arranged to paythese two individuals $160,000 to eliminate the additional tax assessment of $385,000proposed by the Pertamina auditors. Triton Indonesia paid $165,000 to a company con-trolled by Siouffi in August 1989.13 A few weeks later, that company paid $120,000 and$40,000, respectively, to the two Pertamina auditors. Triton Indonesia's controller pre-pared false documentation for the payment made to Siouffi's company. The documen-tation indicated that the payment was for seismic data purchased for the Enim Field.

In August 1989, a BPKP auditor reminded Triton Indonesia officials that their firmstill owed $233,000 of taxes.An executive of Triton Indonesia discussed this matterwith Siouffi.After meeting with the BPKP auditor,Siouffi told Triton Indonesia's man-agement that in exchange for $20,000 the auditor would reduce the $233,000 tax billto $155,000.Triton Indonesia processed a $22,500 payment to another company con-trolled by Siouffi,who then paid the BPKP auditor $20,000.Triton Indonesia's control-ler prepared false documentation indicating that the payment to Siouffis companywas for equipment repairs at the Enim Field made by Siouffi s employees. Followingthe payments made to the Pertamina and BPKP auditors by Siouffi,Triton Indonesiareceived letters from the two audit teams indicating that they had resolved the issuesraised during the tax audit.

Throughout 1989 and 1990, Triton Indonesia continued to channel improperpaymentsto various government officials through Roland Siouffi. Triton Indonesia fabricated falsedocumentation to "sanitize" each payment for accounting purposes. The SEC identified$450,000 of such payments recorded in Triton Indonesias accounting records.

Triton Indonesia officers periodically briefed key members of Triton Energy's man-agement regarding the payoffs funneled through Siouffi. In these briefings, the TritonEnergy officers also iearned of the false accounting entries and documentation pre-pared to conceal the true nature of the payments. "The Triton Energy officers ex-pressed concern about such practices which they had neither directed nor authorized,but failed to require Triton Indonesia to discontinue those practices." At one point, aTriton Indonesia officer directly told Triton Energy's president that illicit payments were

13. Triton Indonesia paid Siouffi a "commission" for the illegal payments he funneled to governmentofficials. In this case, the commission was $5,000.

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cAsE 3.4 TRnoN ENsncy Lrn.

i'****-'"; l:_i:l:::ylY,jl".,,:lli:y r.id the securities and Exchange Commission 6raj ;;dili;]

213

EXHIBIT 3

TRmoN Exancy'sDrsclosuRs orSEC Serrr-En,tu,um 1996 FwnNcur_Sr.qren,tmrFoorNoresr Indonesia,Inc. on its retations with the Indonesian state oit.o*p*y un?;;r,hr;,v:

rrrLUr'

: misbooked the payments and faited to maintain adequate internai.ontrorr. Under the terms :'

of the. setttr-,:n!, the com.pany's subsidiary, TEC, was permanentty enj.,*iir.r,, tri;;""" l.vio[ationsofthebooksandrecordsandinternatcontro[provisioni.rir,,i..,'ii;.;;;;;,,n., Act of 1,934 and paid a.civitmonetary penatty of $300,000. In 1,996,tfr. Cr*prry *.rlJJl.U lthat the Department of Justice had conctuded a parattel inquiry without.;i,rr;;;;;;;;.'""

being made to Siouffi. The president responded "that he had worked in another foreigncountry and understood that such things had to be done in certain environments.,,l4SEC Sends o MessogeIn 1997, the SEC climaxed a four-year investigation of rriton Indonesia and its par-ent company by issuing a series of enforcement releases. Those releases chargedTriton and its executives.with violating the anti-bribery, alcounting, and controlrequirements of the FCPA. without admitting or denying ir,.r. .r,urges, six offi_cers oJ Triton Energy and Triton Indonesia signed .onr"ni a".rees that prohibitedthem from violating federal securities laws in the future. The consent decrees alsoimposed a $300,000 nn. 9l Triton Energy and fines of $35,000 and $50,000 on twoformer Triton Indonesia officers. Exhibii3 presents the fooinote appended to TritonEnergy's 1996 financial statements that described tire company's settlement withthe SEC.

Although rriton Energy did not authorize the improper payments and the bogusaccounting for the payments, the SEC sharply criticized two executives who wereaware of the practices and allowed them to continue unchecked.

The senior monogement of.Triton Energy,

-and -, simpry acknowredgedthe existence of such proctices ond fte;ied them os o *rt or'ai,irg business in o for-

eign iurisdiction. The tolero.tion of such proctices is inimicol to a fair business enuiron-ment ond undermines public confidence in the integrity of pubtic corporotions.

The SEC publicly conceded that it intended the Triton case to send a .mes_sage" to corporate managers. SEC officials noted that the case ,,underscored theresponsibilities of corporate management in the area of foreign payments,,rs andimpressed upon u.s. companies thai "it's not o.K. to pay bribes as rong as you don,tget cauq[1."16

Prior to the Triton case, more than 10 years had erapsed since the sEC had firedFCPA-related charges against a pubric io*pury. ouiing the rate 19g0s, frequentallegations of improper foreign payments by U.S.-corporuiio* prompted the sEC toinitiate severai FCPA investigations. The SEi attributed tr,e upparent increase in such

; settlement of the sEC's investigation of possibte viotations of;he io;e;g; corrupt practices Act: in connecfion with Triton Indonesia, Incis former operations in Indonerlu. L. investigationi f::::,f1:r":..::r:::tdecree.rasis in which the company ,.t*,., raritted nor denied: :t?rg.: made bv the sEC that the company viotated the secuiities Er.h*il;;;i ,rr? ,,,,.. li l:j:::ll'i:,il:.::l*.-"r.,,: l?yi*I in 1e8e and 1ee0 to, .on,,tt,niJ.",g i,il, ,

14 Apparently, the attention drawn to the illicit payments by the lawsuit filed by Triton Energy,s formercontroller caused Triton Indonesia to stop making ihose payments.15' Securities Regulotion ond Lou Report,"SEC official Predicts More FCpA cases in Near Future,,, Vol. 29,No. 18 (2 May 1997),607.16

_L Eaton, "Triton Energy Settles Indonesia Bribery Case for $300,0 00,,, The New york rimes,28 February 1997,D2.

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214 sEcTloN IHREE INIERNAL CoNrRol- Issur,s

payments to the increasingly global nature of U.S. corporations.lT Each year, addi-tionalU.S. companies attempt to establish footholds in emerging markets. Funnelingunlawfulpayments to officials of foreign countries is often the most effective methodof breaking down entry barriers to those markets.

The growing sophistication of illicit foreign payment schemes complicates theSEC's efforts to rigorously enforce the FCPA. In fact, critics of the FCPA suggest thatit is practically unenforceable except in the most blatant cases. As one journalistnoted, the days of "bulky cash payments in large sealed envelopes" are long past.

Now the bribes, kickbacks, ond "focilitoting poyments," such os those described in Iii-ton Energy's internalmemorandunl, more ot'ten get chonneled through expensiue "con'sultants," dummy chorities, ond construction projects thot neuer seem to moteriolize.ts

Many corporate executives have lobbied against enforcement of the FCPA. Theseexecutives maintain that the federal law places U.S. multinational companies at a sig-nificant competitive disadvantage relative to other multinational firms. A member ofPresident Clinton's administration supported this point of view when he observed thatthe U.S. is the only country that has "criminalized bribery of foreign officials."ie' 20

Bill Lee was never directly implicated in theIndonesian payments scandal and retired asTriton Energy's CEO in January 1993. ThomasFinck, who came to Triton after the Indonesianscandal, replaced Lee as Triton's CEO. In1996, a lournalist noted that Triton's new CEOseemed to be employing some of his prede-cessor's "old tricks."21 One of Finck's firstmajor decisions was to reorganize TritonEnergy as a subsidiary of an offshore hoid-ing company headquartered in the CaymanIslands. Finck reported that moving Triton'sheadquarters to the Cayman Islands would sig-nificantly reduce the company's tax burden.Critics placed a different spin on the decision.They suggested that the company's desire "toavoid scrutiny under the U.S. Foreign CorruptPractices Act" likely motivated the move tothe Caymans.22

,:.;;;' l1 i i."'.

Triton Energy sold its Indonesian subsidiaryin 1996 but under Finck continued its high-riskstrategy of searching for obscure and overlookedoil fields across the globe. Depressed oil pricescaused the value of Triton's sizable oil reservesto fall dramatically during the 1990s, leaving thecompany in a financiallurch in early 1998. Com-pany officials announced that Triton was for saleand retained an investment banking firm to finda potential buyer. When a buyer could not befound, Triton announced plans to restructure itsoperations and to continue as an independententity. That announcement caused Triton's stockto plummet to its lowest level in severalyears andprompted Thomas Finck to resign as the compa-ny's CEO. A few years lateE in the summer of 2001,Triton Energy's tumultuous history as an indepen-dent firm ended when Amerada Hess purchasedthe company for a reported $2.7 billion.

17 . Securities Requlqtion and Low Report, "SEC Of ficial Predicts More FCPA Cases."18. A. Zipser, 'A Rarely Enforced Law," Borron's, 25 May 1992,14.

19. Ibid.20. The FCPA was initially unclear regardlng whether or not so-called "facilitating payments" qualifiedas bribes and thus were illeqal under that federal statuie. Cenerally, bribes are significant amounts paidto foreign governmental officials to secure or retain business, while facilitating payments are relativelymodest and routine payments typically made to lower-ranking governmental officials to expedite or"facilitate" business transactions. In 1988, the FCPA was amended to address that issue. As amended,facilitating payments made to encourage "routine governmental action" are not covered by the FCPA.21. A. Zipser, "New Management, Oid Tricks as Oil Firm Heads for Caym ans," Borron's,25 March 1996, 10.

22. Ibid.

cAsE 3.4 TnnoN Exsncy Lro.

Questions1. Identify the key factors that complicate the audit of a multinationalcompany.2. Identify specific control activities that Triton Energy could have implemented

for Triton Indonesia and its other foreign subsidiaries to minimize the likelihoodof illegalpayments to government officials. Would these controlactivities havebeen cost-effective?

3. Does an audit firm of a multinationalcompany have a responsibility to applyaudit procedures intended to determine whether the client has complied withthe FCPA? Defend your answer.

4. If a company employs a high-risk business strategy, does that necessarilyincrease the inherent risk and control risk components of audit risk for thecompany? Explain.

5. what responsibility, if any, does an accountant of a public company havewhen he or she discovers that the company has violated a law? How does theaccountant's position on the company's employment hierarchy affect thatresponsibility, if at all? What responsibility does an auditor of a public companyhave if he or she discovers illegal acts by the client? Does the aurlitor's positionon his or her firm's employment hierarchy affect this responsibility?

6. If the citizens of certain foreign countries believe that the payment of bribesis an acceptable business practice, is it appropriate for U.S. companies tochallenge that belief when doing business in those countries? Defend youranswer.

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