Sonoma Construction

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Expanding your business into a foreign country is always a risky and tricky endeavor. Sonoma Construction company desire to go into Nigeria to build oil pipelines can become a very profitable expansion but it does come with some if not a lot of risk. Sonoma construction does about 40% of their business in developing nations, such as Nigeria, so the company is used to dealing with these issues. Doing business in developing nations is always difficult because of the way the governments are set up in those countries and the fact that you never know how volatile a developing nation’s government can be. All of that makes the procedures for bidding and contracting very difficult, and the level of how difficult it can be depends on the country. The top three fraud risks facing Sonoma Construction in their expansion into Nigeria are bribery, payroll expense fraud, and misappropriations in the acquisition and payroll cycle. The first fraud risk was bribery. This is a problem for Sonoma because it is a problem for any company trying to do business in a foreign nation. The competition to be the first company into a developing nation is so high; many companies will do whatever it takes, legally or illegally, to be in business in that country. A lot of times that reason alone will create the opportunity to want to give bribes to officials in that country. The problem with that is with the passing of the Foreign Corrupt Practices Act (FCPA), which makes offering a bribe to a foreign official for the purposes of exerting influence or obtaining business, offering any bribes is highly illegal. Another issue is since Sonoma does business and has an office in Great Britain, they could possibly also be subject to the UK Bribery Act which is very similar to the Foreign Corrupt Practices Act. Even with these dangers Sonoma might still be inclined to offer bribes to officials because of the incentives involved; which include being the first company in their industry in Nigeria....
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