In the article, “Good people do file bad expense reports”, Wensley (2014) defines the concept of ethics concerning reporting expenses. Presently, there has been a rise in the cases of managers being prosecuted for misusing revenues in different organizations. However, little has been done to distinguish exorbitant expenses from normal expenses in relation to the standards of an organization. Consequently, Wensley (2014) sets out to define some of the ways through which managers can avoid prosecutions arising from misappropriation of companies’ funds through exorbitant expenses.
The author begins the article by questioning why some reports on expenses generate scandals, thus leading to the prosecution of the officers or managers involved. According to Wensley (2014), both private and public sectors are prone to scandals, but most people are quick to notice misappropriations that involve small amounts. However, the misappropriations involving small amounts unearth scandals involving large amounts for which the culprits are convicted (Wensley, 2014).
The author further highlights greed and conflicts between personal interests and those of an organization as the key factors contributing to the fraud in different companies. Nevertheless, the author warns the public against judging the decisions of the management before reviewing whether the determinations are in line with the companies’ standards and the international standards of accounting and reporting. However, the author highlights that people cannot rationalize their actions, and thus they act ethically. Wensley (2014) highlights proper rules and periodic reviews as remedies to curbing fraud in both public and private institutions.
Concerning management accounting, Wensley (2014) addresses the concept of reporting expenses of an organization. Organizational expenses form part of the costs that are charged to different cost centers as emphasized by the principles of management accounting. Furthermore, management accounting stipulates reporting as a vital role of management accounts. The article propagates the above role by providing standards through which managers should formulate expenditure reports. According to Wensley (2014), the reimbursements made to personal accounts by companies should be in line with the set standards that govern expenditure.
Such a stipulation highlights the role of managers in providing reports that involve the structure of the companies’ finances. Apart from highlighting the reporting role of management accountants, the article incorporates some of the concepts of management accounting. For example, through the illustration of CEOs purchasing personal items at exorbitant prices and charging their expenses to the company’s account, Wensley (2014) highlights the concept of value costing and cost-benefit analysis before making purchasing decisions.
I agree with the author that employees and managers should rationalize their actions before incurring expenses to be charged to the account of an organization. Fraudulent and exorbitant expenses ruin a company’s financial structure, image, and the stakeholders’ investments. Furthermore, adverse effects of unethical practices trickle down to employees, thus affecting their earnings. Similar to Wensley’s recommendations, a clear interpretation of the company’s rules and audits should end fraud within organizations.
The article addresses the aspect of reporting expenses and fraudulent activities arising from improper standards of reporting or reimbursing expenses. Although the article is brief, the author has used sufficient illustrations from both the private and public sectors to present her opinions. However, Wensley has used technical aspects of ethics, thus making it difficult to relate ethics and best practices within an organization.
Reference
Wensley, K. (2014). Good people do file bad expense reports. Web.