A subsidiary, XYZ, of a large corporation, BETA Inc, provided services to the other subsidiaries...

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Accounting

A subsidiary, XYZ, of a large corporation, BETA Inc, provided services to the other subsidiaries of BETA Inc. A strategy was deployed whereby XYZ'S transfer pricing of services provided was vastly inflated reducing the profits of the other subsidiaries and affected the performance bonuses of the other subsidiaries employees.

What ethical and legal issues can you identify with this practice?

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