Bachelor of General Studies (BGS) Degree Practice Exam

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Which U.S. Act forbids bribery of foreign officials by executives of U.S.-based companies?

Foreign Corrupt Practices Act
Sarbanes-Oxley Act
Insider Trading Act
Consumer Protection Act

The correct answer is: Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act is the primary legislation that prohibits U.S.-based companies and their executives from bribing foreign officials to gain business advantages. Enacted in 1977, this act is significant as it aims to promote ethical business practices and enhance transparency in international commerce. By making it illegal to offer, promise, or authorize the payment of any money or anything of value to foreign officials, it holds companies accountable for their actions abroad, thus fostering a level playing field in global business. The other options focus on different aspects of business regulation. The Sarbanes-Oxley Act primarily addresses corporate governance and financial practices to protect investors from fraudulent accounting activities. The Insider Trading Act deals with the illegal buying or selling of securities based on non-public information. The Consumer Protection Act is focused on ensuring fair trade and protecting consumers from unfair practices, but it does not specifically address the bribery of foreign officials. This context reinforces why the Foreign Corrupt Practices Act is the correct answer.