Reply to another reply post to the student: $1.$ What effect does lowering of the estimate for doubtful accounts have on the income statement and balance sheet?$$Lowering the estimate for doubtful accounts can decrease bad debts expenses on the income statement, which can make the net income look like it increases. On the balance sheet, it lowers the allowance for doubtful accounts, and increases the accounts receivable balance. This would make the company's financial position look better than it really is$.$

$2.$ Do you believe Lopez's recommendation to adjust the allowance for doubtful accounts is within her rights as a manager, or do you believe the action is an ethics violation? Justify your answer. I think that Lopez's recommendation is a ethics violation. Managers are able to give suggestions, but changing estimates for personal gain is unethical and dishonest. It goes against the principles of fair and accurate financial reporting.$$

$3.$ What type of internal control$($s$)$ might be useful for this company in overseeing the manager's recommendations for accounting changes? They should separate responsibilities so that managers who benefit from financial results should not have authority to approve or record accounting changes. Having regular reviews$/$audits by outside auditors would help ensure that accounting estimates are fair and accurate.$$