Reply to student in a positive reply:$1.$ Lowering the estimate for doubtful accounts makes the company's expenses look smaller, which increases net income on the income statement. On the balance sheet, it makes accounts receivable look higher than it really should be$,$ which can be misleading.

$2.$ I believe Lopez's recommendation is an ethics violation. Even though she might have the authority to make changes, adjusting the estimate just to increase her bonus is unethical and dishonest. It doesn't represent the company's true financial health and can lead to problems down the line.

$3.$ Some useful internal controls for this company could be having a person or team review any changes made to financial estimates, especially ones that impact income. It would also help if there were clear approval steps before making adjustments, and if bonuses were based on a mix of performance measures, not just net income.$$