Zonton, a UK public limited company, has been experiencing a downturn in its fortunes. The company’s performance in the past seems to have moved in line with the performance of the UK economy. The directors of the company are concerned about the current economic climate in the UK and are looking for suggestions to reduce their risk to the UK economy and to boost profits. Cara Van informed the board at a brainstorming session that a way to alleviate the impact of the expected downturn in the economy would be to open a factory in Tomarat (a fictional emerging economy). She suggests that with a couple of small bribes – to the right people – a suitable factory can be obtained and that the local indigenous population (from the age of 5 upwards) would be delighted to work for a mere fraction of the wages being paid in this country. This would reduce costs and increase profit margins, which would more than outweigh the expected reduction in sales units.

Required
Your father sits on the board of this company and he asks you as an accounting student for advice on the appropriateness of this proposal.