Ethan works for a small public accounting firm (10-20 personnel, 3 partners) primarily performing tax preparation and small business consulting as an entry level staff associate. He has been on the job for just over 2 years. Simultaneously he is working on passing the last section of the CPA exam. He likes his job, is accomplishing all of his assignments, and is progressing rapidly in the level of responsibility within the firm. The managing partner of the firm has just assigned Ethan to work on a new big client, ALPHA Co. The owner of ALPHA Co is a good friend of the managing partner, and Ethan is told to give them special attention and priority. As Ethan begins the engagement he is introduced to the ALPHA Co controller, Kevin, who happens to be the son of the owner of ALPHA Co. Kevin is a newly licensed CPA, just a few years older than Ethan, and is a very likable person. Over the course of time Ethan becomes friends with Kevin, views him as a professional mentor, and they begin to attend social functions together outside of work. At first there does not seem to be any problem, but over time Ethan notices that Kevin parties pretty hard. When they are out Kevin tends to pick up the tab, and even comments hey, its deductible. As Ethan is working on the ALPHA Co tax preparation he notices that there are many expenses in the books from the bars and restaurants that he and Kevin had frequented. Ethan knew there was absolutely no business purpose to any of their outings. Concerned, he digs a little deeper into the books and finds additional expenses that do not seem to belong on the company books. He asks Kevin about the expenses, and Kevin just says hey Im doing business all the time, and those are just out of pocket costs that I have been reimbursed for. Ethan notes that one of the expenses was for a weekend trip to Las Vegas. Ethan knew Kevin was on vacation over that weekend and that much of the actual expense was for alcohol and gambling.