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Summarize the facts of the situation. Identify pressures leading to the ethical situation. Identify & explain the accounting issue(s) involved (make sure you show understanding).
Summarize the facts of the situation. Identify pressures leading to the ethical situation. Identify & explain the accounting issue(s) involved (make sure you show understanding). Impact of current vs. proposed accounting. Why is the change proposed? Identify the ethical issue. Identify & evaluate alternative courses of action and possible consequences of each course of action. At least two alternatives Discuss your decision & recommended course of action.
Ethical Dilemma The management of the Auto Parts Division of the Santana Corporation receives a bonus if the division's income achieves a specific target. For 2021 the target will be achieved by a wide margin. Mary Beth Williams, the controller of the division, has been asked by Philip Stanton, the head of the division's management team, to try to reduce this year's income and bank some of the profits for future years. Mary Beth suggests that the division's bad debt expense as a percentage of the gross accounts receivable balance for 2021 be increased from 3% to 5%. She believes that 3% is the more accurate estimate but knows that both the corporation's internal auditors as well as the external auditors allow some flexibility when estimates are involved. Does Mary Beth's proposal present an ethical dilemma
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