Case 3.9 Walmart de Mexico

Walmart was accused of paying bribes to access permits to operate in Mexico. The company made illegal payments to government officials to acquire the permits. There are internal control activities that could have reduced the possibility of the company making illegal payments.

A major activity would be adhering to best practices. As a business ethics, any company should follow the best business practices but what Wallmart did was not a good business practice (Knapp 327). The company should have followed the official channels of acquiring the permits. Though this could have required a lot of time and resources, the company still spent large sums of money to pay government officials.

Again, if there was segregation of duties in the company, some other employee could have noticed the inappropriate action. Segregation of duties is important in ensuring such actions do not happen without being detected.  The fact that the company was audited and the auditor never detected the payments means that the internal control was poorly designed. Authorization and approval is another major activity that could have prevented the massive payments. If all payments are authorized and approved by the high management, it would have made it hard for the payments to be made.


Work cited

Knapp, Michael Chris. Contemporary Auditing: Real Issues and Cases. Tenth ed. Australia: Cengage Learning, 2014. Print

Public Company Accounting oversight Board (PCAOB).  “Auditing Standard No. 12 “. 2010. Web. 24 Oct. 2015. Retrieved from

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