A very important client, Bob, is in town and his expenses are being covered by XYZ company. This client controls a large portion (over 50%) of the...

A very important client, Bob, is in town and his expenses are being covered by XYZ company. This client controls a large portion (over 50%) of the business XYZ company does each year. When he submits his expense report, John, the accounts payable manager, discovers a rather expensive line item for a "gentlemen's club" that has been known to be involved in illegal activities. This is an expense that the XYZ company handbook explicitly states that it doesn't cover. Should XYZ company cover the line item or not? Explain your answer.