Ethical Scenario You are the part-time bookkeeper for Garfunkel's,company that has provided pet sitting services for dogs for several years. Recently the company's two owners, Paul and Art expanded the business, to provide sitting services for all pets,and to provide pet musical therapy. When the business expanded you were asked to create several new accounts on the general ledger for the new revenue and expense line items. At the same time, Paul asked you to create a new expense account titled "Misc Other Expenses". You've noticed that on occasion Paul asks for reimbursement of personal expenses, and he asks you to record these transactions to Misc Other Expenses. Paul runs the accounting and finance part of Garfunkel's. Art interacts with the customers and hires and supervises the pet sitters and musical therapists. As far as you know,Art doesn't look at the bank statements or monthly financial reports that you prepare. And Art has never submitted personal expenses for reimbursement. Question 1 of I What do you do in this situation? Why?Would you tell Art?Do you assume Paul and Art both know what's going on and that it's none of your business , just keep doing your job as Paul is asking you to do? Would/should you go to Paul first and let him know of this discrepancy? Are you worried Paul will fire you?What if Paul says "Art knows what's going on, don't worry about it", but you suspect that Art doesn't really know? Type your answer below.

In this situation, it is important to consider the ethical implications of recording personal expenses as business expenses. Recording personal expenses as business expenses is considered unethical and is also illegal. It can lead to financial misstatements and can also have legal consequences for the company.<br /><br />As a bookkeeper, it is your responsibility to ensure that the financial records of the company are accurate and comply with accounting standards and regulations. In this case, you should not record the personal expenses of Paul as business expenses. Instead, you should inform Paul that it is not appropriate to record personal expenses as business expenses and explain the potential consequences of doing so.<br /><br />It is also important to consider the potential conflict of interest that may arise if you continue to record personal expenses as business expenses. As the bookkeeper, you have a fiduciary duty to the company and its owners to act in their best interests. By recording personal expenses as business expenses, you are not acting in the best interests of the company.<br /><br />In terms of whether you should inform Art about the situation, it is important to consider the potential impact on the relationship between you, Paul, and Art. If you inform Art about the situation, it is possible that he may take action to address the issue. However, it is also possible that he may not be aware of the situation and may not take any action.<br /><br />Ultimately, the decision of whether or not to inform Art about the situation is a difficult one and will depend on the specific circumstances of the situation. However, as a bookkeeper, it is important to act in the best interests of the company and to ensure that the financial records of the company are accurate and comply with accounting standards and regulations.