Financial Conduct Authority (FCA) UK Regulation Sample Exam

Which ONE of the following is a defence against an accusation of bribery?

1. Providing financial incentives to all employees

2. Adequate procedures to prevent bribery were put in place

3. Documenting all transactions regardless of their nature

4. Having a signed contract with all clients

The correct answer is: Adequate procedures to prevent bribery were put in place

Adequate procedures to prevent bribery are recognized as a strong defense against accusations of bribery because they demonstrate a proactive approach to compliance and ethical conduct within an organization. This concept is grounded in regulatory frameworks such as the UK Bribery Act 2010, which emphasizes the importance of having robust anti-bribery and corruption policies and procedures in place. By implementing adequate procedures, a company can show that it has taken all reasonable steps to prevent bribery from occurring. This includes conducting risk assessments, providing training to employees, establishing clear policies, and monitoring compliance. If these measures are properly documented and enforced, they can significantly mitigate the chances of bribery occurring and provide a defense if an accusation arises. Other options might not provide the same level of protection. For example, simply providing financial incentives to all employees could potentially encourage unethical behavior rather than prevent it. Documenting transactions, while essential for transparency, does not inherently safeguard against bribery. Likewise, having a signed contract with clients is important for legal and business operations, but it does not address the overall organizational responsibility to maintain ethical standards in dealing with bribery.