Triton Enrgy Ltd

Triton Energy Corporation became one of the 20 significant “independent” oil and gas producers by 1985 because of the oil bust of 1980s. To gain competitive advantage, Triton focused its exploration efforts overseas. They began establishing close relationships to relevant authorities and government officials in order to facilitate smooth operations. Rumors have been attacking the business in 90’s alleging them of bribery towards foreign officials, usage of creative accounting methods and intimations of other corporate wrongdoings.

The controversy was centered on one of the subsidiaries of Triton Energy, TRITON INDONESIA. SEC investigations revealed violations of the FCPA. There were fraudulent payments to tax authorities and third party auditors as bribes in order to evade assessed additional taxes charge to them. Triton Indonesia also fabricated false documentation and recognized inexistent projects to sanitize the payments for accounting purposes. Two Triton executives were also discriminated for having tolerated these unethical acts.

Auditor’s Dilemma

The auditor’s dilemma is whether to perform the audit in accordance to ethical standards and to apply audit procedures intended to determine whether the client has complied with FCPA or to disclose in the audit the practice of Triton Indonesia of bribing government officials and falsifying accounting records.

Auditor’s Question

How can the auditor protect itself from threats to integrity and objectivity created by the client and consider the FCPA in the audit?

Research Questions

• In acceptance of an audit, will the auditor consider the type of strategy and risk involve with the strategy employed by a company?

• In the conduct of the audit, what safeguards can the auditor apply to prevent threats from integrity and objectivity in the form of bribery? And what safeguards Triton Energy could have applied to minimize the occurrences of the illegal payment to foreign government officials?

• When illegal...