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1-21 Ethical Issues

1-21 Ethical Issues
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Management Accounting (Atkinson), 5th Edition
1-21 (Ethical Issues) You are employed as a senior manager in an insurance organization. On of your responsibilities is to randomly review claims for reimbursement that have been submitted by people who have traveled on the organization's behalf. By chance you have pulled a falsified claim that was submitted by Andrew one of your closest friends. You decide to confront your friend with your findings.Andrew knowing that you are friends replies "Sure the claim contains false items. Everybody does it and it is almost expected. Stunned by his confession you tell him that he has to resubmit an accurate claim. Andrew responds "Look, I don't feel like I get paid enough in this lousy organization, this is my way of getting back a few extra dollars each month. You know how they have been working all of us to death after the layoff, am entitled to this and I refuse to resubmit the claim
A) What do you think of Andrew's argument?
B) Should you have approached him differently?
C) What should you do know and why?
D) How might the company's control system be designed to foster high ethical standards regarding reimbursement claims and other issues?



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