(Disclosure of Estimates-Ethics) Patty Gamble, the financial vice-president, and Victoria Maher, the controller, of Castle Manufacturing Company are reviewing the financial ratios of the com- pany for the years 2006 and 2007. The financial vice president notes that the profit margin on sales ratio has increased from 6% to 12%, a hefty gain for the 2-year period. Gamble is in the process of issuing a media release that emphasizes the efficiency of Castle Manufacturing in controlling cost. Victoria Maher knows that the difference in ratios is due primarily to an earlier company decision to reduce the estimates of warranty and bad debt expense for 2007. The controller, not sure of her supervisor's motives, hesitates to suggest to Gamble that the company's improvement is unrelated to efficiency in controlling cost. To complicate matters, the media release is scheduled in a few days. Instructions

(a) What, if any, is the ethical dilemma in this situation?

(b) Should Maher, the controller, remain silent? Give reasons.

(c) What stakeholders might be affected by Gamble's media release?

(d) Give your opinion on the following statement and cite reasons: "Because Gamble, the vice pres- ident, is most directly responsible for the media release, Maher has no real responsibility in this matter."