1. Identify control activities that Wal-Mart could have implemented for Wal-Mart de Mexico and its other foreign subsidiaries to minimize the likelihood of illegal payments to government officials. Would these control activities have been cost-effective? Since 2002, whistleblowing has been an effective option to uncover unethical and or illegal business practices across the United States. Another control activity Wal-Mart could have implemented for its foreign subsidiaries is creating a centralized organization and develop a corporate structure and governance that filters to its subsidiaries “increasing international harmonization of business standards” (Tawiah, 2015, p. 46). Requiring the same internal control procedures for each subsidiary can be costly to implement, however the cost of fraud and damage to the reputation of the organization can outweigh this cost of concern. In this scenario, by having a standard procedure, there would not have been disagreement between senior level executives as reported by the New York Times (Knapp, 2015, p. 328). Also, the executive accused of authorizing the bribes would not have been in charge of the investigation.
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What responsibility, if any, does an accountant of a public company have when he or she discovers that the client has violated the law? How does the accountant’s position on the company’s employment hierarchy affect that responsibility, if at all? What responsibility does an auditor of a public company have if he or she discovers illegal acts by the client? Does the auditor’s position on his or her firm’s employment hierarchy affect this