Conflicting Interests | 14 Feb 2023

Kavita, is an IRS officer who has been assigned to audit a large corporation. During the audit, she discovers that the corporation has been evading taxes by hiding its profits in offshore accounts. Kavita is faced with a dilemma as the CEO of the corporation is a close friend of hers and has helped her many times during her years of struggle. The CEO has offered her a bribe to overlook the tax evasion.

Now Kavita’s personal relationship with the CEO has created a conflict of interest that may compromise her ability to perform her duties objectively.

Now there are three alternatives available for Kavita regarding this situation:

(a) Report the tax evasion to her superiors and make the corporation face legal consequences.

(b) Overlook the tax evasion in exchange for the bribe.

(c) Resign from this audit to avoid the conflict of interest.

Which of the above do you think is the most suitable option for Kavita?