On a recent trip to Hongkong, Brian Santos, sales manager of Micro- electronic Devices, took his wife at company expense. Erika Tan, vice- president of sales and Santos' boss, thought his travel and entertainment expenses seemed excessive. Tan approved the reimbursement, however, because she owed Santos a favor. Tan, well aware that the company president routinely reviewed all expenses recorded in the cash disbursements journal, had the accountant record Santos' wife's expenses in the general journal as follows: Sales Promotion Expense 35,000             Cash 35,000 What is the ethical issue in this situation? What role does accounting play in the ethical issue?

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
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On a recent trip to Hongkong, Brian Santos, sales manager of Micro- electronic Devices, took his wife at company expense. Erika Tan, vice- president of sales and Santos' boss, thought his travel and entertainment expenses seemed excessive. Tan approved the reimbursement, however, because she owed Santos a favor. Tan, well aware that the company president routinely reviewed all expenses recorded in the cash disbursements journal, had the accountant record Santos' wife's expenses in the general journal as follows:

Sales Promotion Expense 35,000             Cash 35,000

What is the ethical issue in this situation? What role does accounting play in the ethical issue?

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