Case Studies

Search Case Studies

All Areas of Concern

Search Case Studies

All Areas of Concern

Leonard was an accounting manager of a listed company. After returning from a regional meeting, company’s department heads filed their expense vouchers.  Nothing was out of the ordinary except that one new department head, Cain, submitted a voucher for $6,000 less than the others.  Someone in the accounting department thought that this was strange as everyone used the same transportation and stayed at the same hotel.  But Leonard who had worked in the company for long enough knew that padding travel expenses was not uncommon.  Some of the vice-presidents even joked about it as being an additional fringe benefit.  However, the company policy clearly stated that such cases were strictly prohibited and that violators would face demotion or termination.  It’s Leonard’s job to decide how to enforce the policy.


What should Leonard do?  Should he suggest Cain following the others and amending the claims?  Should he take serious action against all the others?  Should he issue reminders to all staff to reiterate the company policy?

Case Analysis

Leonard could refer to the ETHICS PLUS ethical decision making model in solving his ethical dilemma at work. The following factors should be taken into consideration when identifying viable alternatives and choosing the best course of action:


  1. Any violation to his professional, industry specific, or company code of conduct?
  2. Is it against the Law?
  3. Does it correspond with his self-values such as responsibility, fairness and honesty?
  4. Can he disclose his decision to others openly and honestly without misgivings?


As far as professional conduct is concerned, Leonard should observe the fundamental principles of integrity, professional competence and professional behavior and comply with the Code of Ethics for Professional Accountants (HKICPA Code) when carrying out his duties as the accounting manager.  As the company policy stated very clearly that padding travel expenses was strictly prohibited, he should perform a guardian role and report any non-compliance to the management. He shall discuss with his immediate superior or a higher authority in the company, take appropriate steps to rectify or mitigate the consequences of the non-compliance, and decide whether it should be disclosed to the external auditor.


Moreover, it is an offence under Section 9(3) of the Prevention of Bribery Ordinance (POBO) for any employee to use false documents / receipts / account records with an intention to deceive the employer.  Customary behavior or ignorance of law is no defence. Department heads might have committed the above offence for using false expense vouchers and invoices to deceive the company. They might also have committed a criminal offence of deception contrary to Section 17 of the Theft Ordinance.


Professional accountants have a guardian role in safeguarding the governance of the company and protect the interests of different stakeholders. They should take remedial actions to help the company foster an ethical culture and enforce any related policies.

Back To Top