The Managing Director of your chosen company instructs the accountant to lengthen assets lives to reduce depreciation expense. An equipment purchased in January 2013, was originally estimated to have a useful life of 8 years. The Managing Director wants the estimated life changed to 15 years. The accountant is hesitant to make the change, believing it is unethical to increase profit in this manner. However, Managing Directors says him, The life is only an estimate, and Ive heard that our competitors use a 15-year life on their equipment.

Is the proposed changed in asset life unethical, or is it simply a good business practice by an astute Managing Director? Explain.