It's funny you say that. In my 2nd example, at the startup, the culture initially was similar. We would go out to lunch as a team and expense it. We would go fo

It's funny you say that. In my 2nd example, at the startup, the culture initially was similar. We would go out to lunch as a team and expense it. We would go for drinks after work and expense it ("team building"). As we grew the culture shifted to a "frugal" one, but it was rewarded more with raises and bonuses. Executives sold it to employees not as "cutting costs" but as a gain for employees. At the time we were planning an IPO (this was during the first bubble) and we were sold that if we could show less expenses, more revenue we would end up with higher stock prices thus there was an incentive for us. For the most part though employees were not upset by the transition from spending freely to frugal. I learned from my first job doing expenses that the majority of employees, given simple controls/policies, will abide by them. Some may push the limit from time to time, but blatant expense fraud can be overcome, in most cases, with minimal time/effort and some basic oversight. Having a system of checks/balances (thresholds and management approval limits) along with a final accounting review prior to reimbursement prevents most cases.