Forensics Today: Independent monitors, how to manage and avoid the disruption

PwC perspectives on the newest risks drawing investigator scrutiny

Independent monitors: How to manage, if not avoid, the disruption

  • With enforcement agencies turning to independent monitors to assess whether companies are living up to their compliance obligations, how can businesses successfully limit — or even avoid — a potential monitorship?
  • Avoiding a monitorship after discovery of alleged misconduct is possible if the company has taken immediate action to mitigate the risk of a recurrence and can show that its compliance program is effective.
  • Reducing the term or scope of an assigned monitor is possible with good process management and constructive engagement with the monitor.

Monitorship is a tool the Justice Department and other enforcement agencies use to verify that a company is living up to its compliance and disclosure obligations. It’s used across many areas, including the Foreign Corrupt Practices Act, export controls, antitrust, foreign investor influence, and fraud.

The appointed monitor is usually an independent third party, often an attorney, who draws on experiences from forensic consultants and compliance practitioners. Collectively, the monitorship team assesses the compliance program’s design and operational effectiveness — typically over a two- or three-year period — with regular reporting to the government. The monitor documents the company’s progress in improving its compliance and disclosure efforts and helps mitigate potential future exposures.

Depending on its scope and duration, corporate monitorship can be an intrusive and costly way for companies to show that their compliance programs are up to standards.

Companies are not powerless, though. There are steps they can take to potentially avoid a monitor. If one is ultimately appointed, other measures can help businesses work more effectively with the monitor and, over time, demonstrate sufficient progress to potentially reduce its scope or term.

At risk of a government-appointed independent monitor? Is this even on your radar?

Contact us

Ryan Murphy

Partner, Global Investigations & Forensics Leader, PwC US


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