Would you consider this an Ethical Dilemma?
the controller of Z Co. believes that the yearly allowance for doubtful accounts for Z Co. should be 2% of net credit sales. The president of Z Co. nervous that the stockholders might expect the company to sustain its 10% growth rate, suggests that the controller increase the allowance for doubtful accounts to 4%. The president thinks that the lower net income, which reflects a 6% growth rate, will be a more sustainable rate for Z Co.
What would you do? if you were the controller, would you be worried about the company's growth rate?