Case 12: Phantom Expenses
1. What are the ethical issues in this case?
Padding expense accounts is a frequent ethical issue in business. The ethical questions are
obvious. Is it ethical to misrepresent and overstate one’s expense reimbursement? If the
employees think they are underpaid and that the company really owes them more, is this
regarded as an acceptable justification for the practice? Is the fact that “everyone is doing it” an
2. Given all the factors, what should Jane have done?
Jane faced a personal ethical dilemma. Should she have accurately and honestly reported her
expenses, or did she have some obligation to the others to go along with their practice? It is
3. What would have been the consequences for Jane and the company if she had accurately
reported her expenses? What would the consequences have been if she had inflated her expense
account as Ann had urged her to do?
It is difficult to state all the consequences for Jane and the company of her actions. However,
students should be encouraged to identify each and discuss them. If Jane had accurately reported
her expenses it is possible that nothing would have happened. It might not get noticed. However,
if it was noticed, it may have caused the company to have stricter reimbursement guidelines.
4. What ethical principles would be useful here?
Students should be encouraged to identify all the ethical principles listed in the text that would be
helpful to Jane in this situation. From the viewpoint of justice, it is clear that the just thing for