Manatt's Jacqueline Wolff, co-chair of the firm's Corporate Investigations & White Collar Defense practice, spoke to The FCPA Report for an article on how to decrease third-party corruption risk by securing audit rights.
The FCPA Report says that the vast majority of recent FCPA cases involve third-party intermediaries. Regularly auditing appropriate third parties is a key tool for minimizing risk. But, third parties might resist granting audit rights. Wolff pointed out that granting audit rights is very disruptive to the grantor.
"Think about what a company goes through for a regular audit," she said. Such actions may be necessary and have a good purpose, "but they can be disruptive to the business." When an organization grants another company third-party audit rights, it is willingly submitting itself to an additional audit that is not required by a regulatory scheme or by the government and additional disruptions, Wolff said.