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Week 2 Irac Brief

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IRAC Brief – Stryker Corporation and The Securities Exchange Commissions

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IRAC Brief – Stryker Corporation and The Securities Exchange Commissions

Introduction / Purpose

Business managers are faced with challenges of legal risks by conducting domestic and international business transactions. To avoid misleading of accounting principles and fraudulent business practices an organization must retain strong internal controls within their international operations. Stryker Corporation had been recently confronted by Securities and Exchange Commissions and got a direct experience. In the following reflection, Team B applies the IRAC method of case analysis to observe Stryker’s treatment and conduct of violations connected to the Foreign Corrupt Practices Act (FCPA). We will summarize four factors regarding IRAC: 1) issue 2) rule 3) analysis and conclusion. Thorough analysis of the IRAC results will help Team B’s interpretation of the significance of internal controls in handling legal risk in international business transactions.

Issue

Did “Stryker violated the Foreign Corrupt Practices Act by making $2.2 million in unlawful payments to foreign government officials while describing the payments as legitimate expenses in the company’s books and records?” Did Stryker Corporation demonstrates intentional misrepresentation by failing to plan and preserve an acceptable system of internal accounting controls? Is intentional misrepresentation being displayed in this case (fraud or deceit)?

Rule

“The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq. ("FCPA"), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of

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