Journal of Accounting Education
Accounting/Taxation, Global/International Business
Business Law, Public Responsibility, and Ethics | Finance and Financial Management
This case discusses the Foreign Corrupt Practices Act (FCPA) violations of Texas-based Baker Hughes, in connection with its oil service operations in Kazakhstan. You will assume the position of a newly assigned audit committee member who is trying to understand Baker Hughes’ FCPA violations related to its Kazakhstan operations. Your investigation will involve the examination of the SEC court complaint, press releases, government and company publications and 10-K annual reports. Baker Hughes’ FCPA experiences illustrate the corruption risks and difficulties that multinational corporations encounter in conducting international business. The subsequent creation of a new Baker Hughes Code of Conduct, FCPA Compliance Guide, and Anti-Corruption Compliance Program provide you with a view of the corporate governance policies that companies can implement to help avoid costly penalties and investigations. Case questions address FCPA bribery, accounting and internal control provisions, 10-K filings, red flags indicating bribery (warning signs), and auditor’s responsibilities in uncovering illegal acts.
Holtzblatt, M., Tschakert, N. (2014). Baker Hughes: Greasing the Wheels in Kazakhstan (FCPA Violations and Implementation of a Corporate Ethics and Anti-Corruption Compliance Program. Journal of Accounting Education, 32, pp. 36-60.
NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Accounting Education. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Accounting Education, 32 (2014); 10.1016/j.jaccedu.2014.01.005