What would you do in the following ethical dilemma: Your company is suffering declining sales of its principal product. The president instruct the controller to lengthen asset lives to reduce depreciation expense. A processing line of automated plastic extruding equipment purchased for 6 million, was originally estimated to have a useful life of 8 years and a salvage of 600 thousand. depreciation has been recorded  for 2 years on that basis. The president wants the estimated life changed to 12 years total. The controller hesitant to make the change, believing it is unethical. The president says "hey, the life is only an estimate , and Ive heard that our competition uses a 12-year life on their product equipment."What would you do?

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It is at least somewhat hard to know what to do here without knowing what the law says or what codes of ethics for controllers say about doing this.  If firms are allowed to specify what the useful life of a product is, this becomes a lot less unethical.  However,...

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It is at least somewhat hard to know what to do here without knowing what the law says or what codes of ethics for controllers say about doing this.  If firms are allowed to specify what the useful life of a product is, this becomes a lot less unethical.  However, it is still somewhat questionable.  You have been using one assumption for years and presumably your stockholders have been basing their decisions on those assumptions.  Now you are going to change assumptions solely to cover up a setback to your company.  This seems to be rather underhanded.

I think that what I would want to do is give in to the president but have him or her write a letter to stockholders explaining and justifying the change so that we would be acting honestly towards them. 

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