The Travel Expense Billing Controversy and False Claims Act Essay
PricewaterhouseCoopers LLP (PwC), a major accounting firm, was engaged in unethical billing practices that made millions of dollars in additional revenue to the firm. PwC was charging the clients the entire price of airline tickets and also other travel bills, such as rooms in hotels and rental car, while it was really expending only a small percentage belonging to he total amount charged to it is clients because of applied rebates and savings it received under travel around agencies and airline agreements and negotiations.
Therefore , the company was overcharging clients and pocketing the difference without revealing the practice (AccountingWeb). Yet , since Neal A. Roberts, a PwC employee, learned his employer’s travel billing practices, PwC found by itself in a very challenging situation. Mr.
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Roberts wasn’t in contract with his company’s billing approach and made a lot of attempts to cope with the problem when working for his firm with little success. This individual reached out to the company’s integrity department and an in-house PwC lawyer, but only was able to have the company’s policy modified, not fixed. A group of people (mostly the company’s partners) made a decision that beneath the new policy, PwC would have to disclose a lot of the discounts to its clients but still maintain 8 percent of the rebates as a cover our costs fee although retaining the millions accumulated previously on the earlier rebates (Carroll and Buchholtz 630).
Despite these kinds of policy changes, Neil A. Roberts continued to be dissatisfied and decided to file a False Promises lawsuit against PricewaterhouseCoopers LLP. The Phony Claims Action is a national legislation that was established to make sure companies weren’t circumventing the us government. Under this kind of legislation, anyone that knows about companies that are defrauding the government may sue within the government’s behalf and share in the proceeds from the suit although being guarded from workplace retaliation beneath the qui tam (also known as the whistle-blower) provisions of the Work (Carroll and Buchholtz 630).
In January 2003, Mr. Roberts earned the False Claims legal action against PwC after very much investigation, and the accounting firm agreed to a settlement valued in $54. 5 million though it denied the fraud allegations (Weil 1). Considering this kind of travel charge billing controversy, the company did not obtain sincerity and professionalism and reliability by performing this underhanded practice because of its own gain. It was selfish, only in search of profit, and neglected it is reputation in front of customers and the industry.
In addition , the firm also failed to intricate important plans and regulations in regards to this dishonest practice to be able to prevent business employers from seeking this against the law action. In addition, the accounting firm was lacking an efficient stakeholder administration and significant principles that could have helped build stakeholder relationships. Because the company’s main and secondary social stakeholders are the staff, managers, consumers, ethics panel, management committee, travel companies/airlines, and authorities, PwC will need to develop a strong stakeholder traditions and stakeholder management capabilities.
They can effectively address stakeholder issues and relationships, analyze the stakeholders’ power, monitor their pursuits and needs, speak with them on a regular basis, and stay engaged with them. To do so , the company would be able to discover strategies for working with the key stakeholders and consider the comparative power of diverse stakeholder groupings along with their importance to the problems confronting the organization. PwC desired to be seen while an ethically responsible organization by having an values committee, yet instead, it was only planning to be ethically responsible through legitimation, which is a powerful process by which business attempts to perpetuate its acceptance (Carroll and Buchholtz 95). The company wanted to still obtain financial gain even though Mr.
Roberts and also other partners had already questioned its procedures. For instance, enhancing its coverage to offer discounts of 28 percent when still keeping 8 percent as a fee. As a result, all these issues inspired Neil A. Roberts’ decision in filing a False Statements lawsuit against the accounting firm. The False Claims Take action is good in the sense, that allows an individual to report an organization whenever it is engaging in unlawful activities, but Mr.
Roberts could be applying this Act to gain financial gain when he also participated in the Phony Claims lawsuit against IBM that satisfied in 3 years ago. Consequently, these allegations generate some problems in regards to Mr. Roberts’ intentions.
Was this individual acting ethically to overturn unethical corporations or was he merely acting to merely obtain economic gains, as the Action awards people a talk about of the profits when they search for fraud damages on behalf of the us government? All things considered, PricewaterhouseCoopers LLP would have avoided this multimillion buck lawsuit and scandal only if it had managed its corporate and business legitimacy by observing every laws and regulations, and practicing good ethical principles towards their stakeholders.