From struggle to success: How 3 companies made compliance easy
ARTICLE | January 29, 2024
Authored by RSM US LLP
The compliance burden on organizations is growing, with more regulatory hurdles than ever before. Expansion creates additional inherent risks to an organization’s compliance with laws and regulations. Companies can become vulnerable to increased scrutiny and potential regulatory actions from the lack of oversight of the sales and marketing processes, consolidation of compliance resources, strategic business acquisitions and operating in new high-risk areas. Managing those concerns can mean the difference between identifying root causes, remediating issues, and strengthening processes or suffering potentially significant regulatory consequences.
Sales and marketing compliance concerns
Many companies, including those in the life sciences and health care industries, have specific compliance regulations in place designed to discourage potential bribery or corruption during sales and marketing practices. Activity between company representatives and foreign government officials comes under scrutiny, with regulators looking to thwart any potential market manipulation, abuse of promotional and marketing programs and incentives, improper payments and other fraudulent practices.
In many cases, harmful activity is not intentional, and in some situations, confusion can occur with global or local customs, which leads to inquiries from regulators. Regardless of intentions, controls must be in place that discourage processes that could lead to fines and penalties.
Integration of similar resources
In a quest for ongoing efficiency, many organizations consolidate the same or similar departments during a transaction, developing a streamlined structure with fewer barriers to productivity. However, while increasing efficiency is important, any combined functions must continue to meet the compliance standards.
In addition, growth through acquisition can complicate ongoing compliance. During the integration process, new employees must familiarize themselves with a new culture, and a transition to new compliance processes can result in potential gaps without effective oversight.
Bribery and corruption challenges abroad
Operating a global company means often working in areas at high risk for bribery and corruption. To keep companies from gaining an unfair advantage, regulators seek to discourage improper payments and activities by levying significant fines and penalties on companies that violate anti-bribery and anti-corruption laws.
Regulators expect ethical behavior and business processes, with effective compliance programs that include operational and financial controls. As the barriers to doing business globally continue to fall, companies need to focus on establishing or refining anti-bribery and anti-corruption processes and programs to avoid potential regulatory actions and reputational harm.
A proactive approach to compliance
Organizations contend with several emerging issues that make compliance more complex, from increased regulatory scrutiny to a lack of qualified compliance resources. With companies in all industries and of all sizes experiencing heightened compliance risks, an organization must understand its potential risks, implement effective processes and controls, and create an overall culture of compliance to mitigate organizational risk to an acceptable level.
Call us at +1 213.873.1700, email us at email@example.com or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by Michael Braverman, Greg Naviloff and originally appeared on 2024-01-29.
2022 RSM US LLP. All rights reserved.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Vasquez & Company LLP is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.
For more information on how Vasquez & Company LLP can assist you, please call +1 213.873.1700.
Subscribe to receive important updates from our Insights and Resources.