The WGN Company has a bonus arrangement that grants the financial vice president and other executives a $15,000 bonus if the net income exceeds the previous years by $1,000,000. Noting that the current financial statements report an increase of $950,000 in the net income, Vice President Jack Brickhouse asks Louise Boudreau, the controller, to reduce the estimate of warranty expense by $60,000. The present estimate of warranty expense is $500,000 and is known by both Brickhouse and Boudreau to be a fairly "soft" amount.

Should Boudreau lower her estimate?

What ethical issue is at stake?

Would anyone be harmed by the change in estimate?

Is Brickhouse acting ethically?

What additional analysis can you draw from the information.