The Travel Expense Billing Controversy
Introduction
Neal A. Roberts, an employee of PricewaterhouseCoopers (PwC) found out that his employer was earning millions of dollars a year by way of a billing method that he thought was doubtful. PwC had been collecting large rebates on airline tickets and other travel expenses being charged as expenses to clients of the firm. These rebates were not being returned to the firm’s clients in the form of savings, but the firm was keeping these rebates for it. This was working, because the firm would bill the clients for the full price of airline tickets and other travel-related expense, but privately, the firm negotiated discounts and rebates that they then got at the end of the year based upon total amounts spent. The clients did not know anything of the back-end discounts and rebates the firm was getting; therefore, they were being charged more than the firm’s true out-of-pocket expenses for the items. In October 2001, the firm finally stopped taking airline rebates completely. The company started structuring all discounts as front-end price reductions that would be passed on to the clients. In the professional environment, there are two main areas in which ethical behavior is required. The first point concerns the behavior of the employee at work, in dealing with colleagues, with supervisors and subordinates and also with customers, the second point concerns the behavior of the company itself against its customers, its employees and all others who may are concerned from company. Also you have to distinguish between descriptive and normative ethics. “Descriptive ethics is concerned with describing, characterizing, and studying the morality of a people, an organization, a culture, or a society. […] It focuses on “what is” the prevailing set of ethical standards in the business community, specific organizations, or on the part of specific managers. […] Normative ethics is concerned with supplying and justifying a coherent moral system of thinking and judging. […] It
Neal A. Roberts, an employee of PricewaterhouseCoopers (PwC) found out that his employer was earning millions of dollars a year by way of a billing method that he thought was doubtful. PwC had been collecting large rebates on airline tickets and other travel expenses being charged as expenses to clients of the firm. These rebates were not being returned to the firm’s clients in the form of savings, but the firm was keeping these rebates for it. This was working, because the firm would bill the clients for the full price of airline tickets and other travel-related expense, but privately, the firm negotiated discounts and rebates that they then got at the end of the year based upon total amounts spent. The clients did not know anything of the back-end discounts and rebates the firm was getting; therefore, they were being charged more than the firm’s true out-of-pocket expenses for the items. In October 2001, the firm finally stopped taking airline rebates completely. The company started structuring all discounts as front-end price reductions that would be passed on to the clients. In the professional environment, there are two main areas in which ethical behavior is required. The first point concerns the behavior of the employee at work, in dealing with colleagues, with supervisors and subordinates and also with customers, the second point concerns the behavior of the company itself against its customers, its employees and all others who may are concerned from company. Also you have to distinguish between descriptive and normative ethics. “Descriptive ethics is concerned with describing, characterizing, and studying the morality of a people, an organization, a culture, or a society. […] It focuses on “what is” the prevailing set of ethical standards in the business community, specific organizations, or on the part of specific managers. […] Normative ethics is concerned with supplying and justifying a coherent moral system of thinking and judging. […] It