You are a new summer intern working for a major professional services firm. during your lunch break each day, you and a fellow intern, bob, eat at a local sandwich shop. one day, bob’s girlfriend joins you for lunch. when the bill arrives, bob pays with a company credit card and writes the meal off as a business expense. bob and his girlfriend continue to be "treated" to lunch for a number of days. you know bob is well aware of a recent memo that came down from management stating casual lunches are not valid business expenses. when you ask bob about the charges, he replies, "hey, we’re interns. those memos don’t apply to us. we can expense anything we want. does bob really believe that what he is doing is not wrong? does it matter? what are you going to do about it?

You are chairman of the board of a successful technology firm. there is a nominal federal corporate tax rate of 35 percent, yet the effective tax rate of the typical corporation is about 12.6%. your firm has been clever with use of transfer pricing and keeping money abroad and has barely paid any taxes over the last 5 years; during this same time period, profits were $28 billion. one member of the board feels that it is un-american to use various accounting strategies in order to avoid paying taxes. others feel that these are legal loopholes and corporations have a fiduciary responsibility to minimize taxes. one board member quoted what the ceo of exxon once said: “i’m not a u. s. company and i don’t make decisions based on what’s good for the u. s.” what are the alternatives? what are your recommendations? why do you recommend this course of action?