Astin blair is the manager of a medium-size company a few

Reference no: EM13599151

Astin Blair is the manager of a medium-size company. A few years ago, Blair persuaded the owner to base a part of his compensation on the net income the company earns each year. Each December he estimates year-end financial figures in anticipation of the bonus he will receive. If the bonus is not as high he would like, he offers several recommendations to the accountant for year-end adjustments. One of his favorite rocemmendations is for the controller to reduce the estimate of doubtful accounts.

1-What effect does lowering the estimate for doubtful accounts have on the income statement and balance sheet?

2- Do you believe Blair recommendation to adjust the allowance for doubtful accounts is within his right as manager, or do you believe this action is an ethics violation? Justify you response

3- What type of internal controls might be useful for this company in oversseing the managers recommendations for accounting changes?

Reference no: EM13599151

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