FTC Taking Applications For Herbalife Auditor Position

The Federal Trade Commission announced Tuesday it's seeking applications for an Independent Compliance Auditor (ICA) who will be tasked with assessing and reporting Herbalife Ltd.'s HLF compliance with the settlement it made with the company.

As part of a settlement with the FTC, Herbalife agreed to a $200 million penalty and a pledge to reorganize its business structure. The FTC's ICA will essentially be in charge of following Herbalife's restructured business, including "tracking of retail sales, distinguishing between business opportunity participants and discount buyers, observing limitations on compensation based on personal consumption of products, calculation and payment of multi-level compensation, and certain training requirements."

Related Link: What Does Carl Icahn Think Of Herbalife's FTC Settlement?

The ICA will be selected jointly by both the government watchdog group and the company. However, a court can appoint an ICA if the two entities are unable to agree on a selection.

The ICA's duties will last seven years.

The Value Of Independent Audits

According to Corporate Compliance Insights, regulated companies have an obligation to comply with internal controls that ensure violations of law do not occur undetected. It added that conducting independent compliance audits is actually the "best way to assess these compliance risks."

"In short, independent compliance audits are an excellent investment for companies who take their compliance programs seriously, devote sufficient resources to make them work, strive for a culture of compliance that does not tolerate wrongdoing at any level, and, in today's climate especially, understand – and want to competently navigate – the daunting regulatory and enforcement minefield in which they are operating," the site also said.