Assume that you work in a firm that sells medical products to both private and public hospitals around the world. Also assume that you are in charge of reviewing allegations received through your firm's whistle$-$blowing system.

Allegations have been made that suggest that subsidiaries of your firm in several countries are engaged in fraud. The allegations are anonymous. The first states:

"Managers in Mexico are paying representatives of the Mexican government in order to win bids for selling products to government$-$owned hospitals throughout Mexico. This has been occurring for feveral years. Management is hiding this activity by generating phony expenses and related receipts. Many of these fake expenses involve large marketing costs."

Another allegation states:

$"$My managers in China are targeting doctors employed by the Chinese government. The managers are taking doctors to $5-$star restaurants, buying them extremely expensive gifts and even sending their families on expensive overseas vacations. Managers are convincing these doctors to recommend only our firm's products to the government."

Questions. Please type one response for each team. Submit your response via Canvas.

Be certain to include the name of every member of the team on the first page of your case responses. Please be thorough in your responses. I would expect each question to have at least a paragraph for the answer $($some will be longer$).$

What would be the purpose of creating the fake expenses in Mexico? And why would managers classify fake expenses as marketing costs?