Many companies do not have adequate travel and expense policies and procedures in place to fully protect themselves from violating the ABC laws and FCPA, both of which can result in hefty fines.
The average ABC enforcement action costs approximately $139 million in penalties and investigation costs (Source: FCPA Professor- DOJ and SEC Penalties), with the average penalty at $66 million, so you can’t afford to have any mistakes.
In these cases, the COO and the CFO are ultimately held responsible because of their failure to supervise the company’s internal controls and maintain accurate books and records. However, even companies that perform regular threshold audits and randomly sample expense reports could still be missing non-compliant expenses that the IRS or SEC could go after.
We analyzed employee spend data from 7 different customers to see how prevalent potential compliance issues are in corporate travel and expense spending. These 7 companies have more than 10,000 employees and over $300 million in annual spend. The companies ranged in size from 1000 to 20,000 employees, and came from sectors including technology, food services, media, financial services, and consumer goods.