Q. The boss treats you, some co-workers and an important out-of-town client to dinner at a four-star restaurant on the company expense account. As the evening passes, the client heads back to her hotel and your boss departs, leaving you and your buddies sipping drinks at the bar. Should the company pay for the margaritas?

A. Technically, the business purpose of the evening ? cultivating a relationship with an A-list client ? is over, says Arthur Gross-Schaefer, a lawyer and rabbi who teaches ethics and spirituality to MBA students at Loyola Marymount University in Los Angeles.

“Once the client has left, there is not a legitimate business expense,” he says, “unless there is an explicit agreement that as a result of good work that the rest of the evening’s libations are a reward of some sort.”

Q.What if you and your colleagues are talking about work?

A. Extending the evening clearly has social value to you. But it’s a bit of a stretch, says Gross-Schaefer, to argue that your late-night, post-repast conversation (fuelled by multiple drinks) has much value to your company.

Better to conservatively interpret the business purpose of the evening as being limited to fraternising with the client, not your colleagues, he said. “You simply don’t want to risk your reputation or the perception of your ethical fibre,” he says, “for the sake of a few free drinks.”

Q.Would sliding a few extra Bloody Marys past accounting really wreck a reputation at most companies?

A. It might. Most companies will look at an offence in this vein ? even one for a minor amount ? as evidence of a lack of ethics, says Gross-Schaefer. He often illustrates this point in his classes with the story of a fellow who was being recruited by two prestigious law firms in the Los Angeles area. The candidate flew out to interview with both firms, charged the flight to both companies and pocketed the extra cash. The firms, which had several partners who socialised, found out about his profiteering. Neither offered him a job.

Q.Doesn’t a lot depend on how a company defines acceptable expenses?

A. Corporate attitudes on expenses vary, says John Putzier, president of FirStep Inc., an HR consulting firm based in Prospect. “I’ve had some client companies that have people who do nothing but go though expense reports with a fine-toothed comb,” Putzier says. “But others are just loosey-goosey.”

Q.What should you do if the corporate culture is more permissive than the written policy?

A. Be careful when you make these judgements, says Gross-Schaefer. There’s a difference between following your boss’s lead and listening to co-workers who assure you that everybody charges an occasional personal lunch to the company. “It’s never a good idea to rely on pointing fingers at others’ behaviour to justify your own,” Gross-Schaefer says.

Q.Is there a good rule of thumb in making these decisions?

A. Behave as if all of your expense reports will receive public scrutiny, says Putzier. For employees at DCI, a marketing firm in New York that helps communities court investment and tourism, that really happens. At each monthly meeting for the 39 staff members, one employee is chosen as the temporary chief financial officer, said Rob DeRocker, executive vice-president of the firm. That person meets ahead of time with the controller and presents the financial statements for the month, including all employee expenses that can’t be billed back to clients.

Because employees share in profits whenever the amount rises above a designated figure, everyone is motivated to keep expenses down, says DeRocker.

“People will ask each other, ‘Did you have to use FedEx that much for this month?’” he says. “Everyone is accountable to everyone else.”

Q.How can you be sure that you’re in safe territory?

A. If there is any question about whether an expense is legitimate, cover it yourself, and discuss reimbursement later, says Gross-Schaefer. He was in Hawaii on vacation and wound up interviewing over lunch a prospective faculty member for the university. While the lunch was a business expense, he didn’t want to have a meal in a restaurant appear as a red flag on his report. So he ran the expense past his dean.

“It’s always a good idea to ask,” Gross-Schaefer says. “That way, if it gets challenged, you’ve been up front from the start. They can question the charge, but they can’t question your integrity”

?NYTNS