B-130961.147,OM, AUG 21, 1980

THE BRIBERY PROVISIONS ARE BEING HANDLED SEPARATELY. OUR RESPONSES TO YOUR QUESTIONS ON THE ACCOUNTING PROVISIONS ARE GIVEN BRIEFLY BELOW. WHAT ARE THE POSSIBLE CRIMINAL PENALTIES? A COMPANY FOUND TO HAVE WILLFULLY FAILED TO COMPLY WITH THE REQUIREMENTS OF SECTION 13(B)(2) IS SUBJECT TO CRIMINAL SANCTIONS. THAT EVERY APPARENT VIOLATION OF SECTION 13(B)(2) WILL RESULT IN A CRIMINAL ACTION AGAINST THE NONCOMPLYING COMPANY. WHAT IS EXPECTED FROM A COMPANY IN ORDER TO BE IN COMPLIANCE WITH THAT SECTION? SECTION 13(B)(2)(B) REQUIRES COMPANIES TO ESTABLISH AND MAINTAIN INTERNAL ACCOUNTING CONTROL SYSTEMS SUFFICIENT TO PROVIDE "REASONABLE ASSURANCES" THAT CERTAIN STATED OBJECTIVES ARE MET. THAT THE NECESSARY CONTROL SYSTEMS WILL HAVE TO EVOLVE.