What is a subordinate to do?

I recently read an article published in early March about the suspension of 16 current and former registered representatives of State Farm VP Management Corp for misconduct involving FINRA's Continuing Education requirements for registered representatives.
Nine of the sanctioned representatives were supervisors who directed or allowed subordinates to take a proficiency test for them. One was a supervisor who directed a subordinate to take the test for other registered representatives. Six of the sanctioned representatives completed the proficiency test for their supervisors. What the article does not include is the number of subordinates, if any, who were asked to take the test for their supervisor and refused. If there are any out there, I offer my heartfelt thanks for taking the ethical high road in a situation that could have cost you your job.
While I have never been asked to take a test for a supervisor I have been asked by a supervisor to cover claims that were clearly not covered. I am happy to say that I refused and there were no repercussions from that refusal. The supervisor just went ahead and issued the payment himself. While I could not stop the payment, at least I had the piece of mind that it did not come from me.
So how do you react when asked to do something by a superior that violates your personal code of ethics? How do you weigh the possible consequences, such as losing your job, when faced with this type of dilemma? This situation has always been a hard one for me to deal with. First, what kind of supervisor puts an employee in this position? The supervisor has violated the trust given by both the employer and the employee. And how can the employee refuse without serious consequences? Most companies will have a human resources representative who can help out the employee. But many are still afraid to give specifics about the bad behavior of their supervisor because of fear of reprisals.
What this boils down to, at the most basic level, is an abuse of power. Those who are invested with power over others should be held to a very high ethical standard by their employers. To paraphrase Dr. Norm Baglini - "A company is only as ethical as its most unethical employee."