When answering this question, you want to come across as confident and relaxed. So before your interview, manifest your confidence through some physical exercise, a pep talk, or practicing some power stances. Raise your arms, stretch your back, and make yourself as big as possible.

"Well, it depends on what kind of ethical violation it is. If it is something egregious, I would report it. If that person could come back from making a poor decision, I would talk them out of it. I just want to do the right thing, and not be put in a questionable position, but would always make the right decision, no matter how uncomfortable."