Question

Expense reimbursement Tehra Dactyl is an accountant for Skeds, Inc., a footwear and apparel company. The company's revenue and net income have increased by more than 100% over the past three years. During the same period, Tehra and her colleagues in the Accounting Department have not received a raise or salary increase. Frustrated by not receiving a raise while the company has thrived, Tehra has begun submitting expense reimbursements for personal purchases. Tehra has a good relationship with her supervisor, and he simply "signs off" on Tehra's expense reimbursements. Tehra suspects that he knows that she is submitting personal expenses for reimbursement and is "looking the other way because Tehra has not received a raise in the past three years. Are Tehra and her supervisor acting in an ethical manner? Why?

Answer 1

No, Tehra and her supervisor are not acting in an ethical manner.

The thumb rule in expenditure reimbursement is the expense undertaken was only because of your job.

However, in the given case study, Tehra's actions are a consequence of frustration from not getting a raising despite the company performing extremely well financially.

Though it is not a justification for Tehra and her supervisor's behavior, it also throws light on the company's ineffective personnel policy for appraisal and promotion and huge communication gap between the employees and the company prompting such behavior.

Aggregate of many such trivial misappropriations may have a huge impact on the financial position of the company.

The ideal course of action for Tehra and her colleagues after not getting a raise should have been to bring this up with the top management. The company must review its personnel policies to ensure there is a smooth relationship between it and the employees, retain competent staff and have stronger internal controls in place to ensure such defalcations do not occur frequently.