What Does the Foreign Corrupt Practices Act Have to Do

question 24

Multiple Choice

What does the Foreign Corrupt Practices Act have to do with accounting?

• A) It requires that U.S. companies properly record bribes made to obtain business from foreign clients.
• B) It requires that appropriate internal control systems be maintained by publicly traded U.S. companies.
• C) It mandates the use of the temporal method of translating assets obtained illegally in foreign countries.
• D) It demands that publicly traded U.S. companies follow international best-practices when auditing illegal operations abroad.

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Definitions:

Conversion Premium

The additional amount an investor pays over the current market price of a convertible security compared to the conversion value of the stock.

Convertible Bond

A bond which allows conversion into a specified amount of the issuing company's stock, often at the choice of the holder.

Conversion Ratio

The specific quantity of shares an investor can receive for each convertible security if they choose to convert it into equity.

Pay-in-Kind Bond

A bond that pays interest in the form of additional bonds or securities instead of cash, often used by companies seeking to preserve cash flow.