Question

Anna Abraham is the accounts payable clerk for Jiffy Delivery Service. This company runs 10 branches in the San Diego area. The company pays for a variety of expenses. Anna writes the checks for each of the vendors and the controller signs the checks. Anna has decided she needs a raise and the controller has told her to wait for six months.

Anna has devised a plan to get a raise on her own. She creates a new vendor for her friend's business with the name John's Car Detailing. She also creates two purchase orders for car detailing service from John's for $75 and $70. She writes checks to John's Car Detailing to pay these invoices. She knows the controller will sign all checks only looking at the checks over $100. She delivers the checks to John who will deposit the checks in his bank account. John then writes a check to her for $145. Is this a good way for Anna to obtain a raise? Is it an ethical practice? Eventually what will be the effect of her actions? What can the company do to prevent this type of behavior?

Answer 1

   

No, this is not a right way to obtain a raise from the employer as it is unethical and wrong practice. An employee is supposed to perform his or her duties with utmost honesty and integrity but the practice of Anna to use unethical means to obtain a raise is absolutely unacceptable.

No it is not an ethical practice. It is completely unethical on the part of Anna. The actions of Anna will have detrimental effects on the functioning of the organization. The internal control of the organization is weak from the fact that Anna could got away without being caught for her malpractice. Each and every single check written by Anna should be properly checked as to the person receiving such check with proper records and books of accounts to ensure there is no excess payment leaking out of the organization. The checking should be tighter. The internal controls should be checked and improved on regular basis to ensure no such frauds and malpractices occur.