Strictly speaking, “materiality” should never be part of an FCPA discussion. A payment or promise to pay anything of value can violate the antibribery provisions, and the books and records provisions apply to any book, record or account. So size doesn’t matter after all.
Even so, materiality discussions sometimes happen. For example, what test applies to small cash gifts to foreign officials that are unrecorded but discovered during pre-acquisition due diligence of a non-U.S. target?
There is no purely quantitative test. Under U.S. accounting standards, small undisclosed amounts can be material, depending on all the circumstances. Some questions to ask are whether the payments are illegal under local law? If the payments stop, does the target risk losing a big amount of business? Do the payments mean the target’s compliance in other areas is questionable? Do they violate loan covenants or other contractual requirements?
An omission or misstatement about small illegal payments can interact with important aspects of the business and thereby become material. So it is more than a matter of numbers.
View SEC Staff Accounting Bulletin: No. 99 – Materiality Here.