Reply to student in a positive reply: $1.$ What effect does lowering of the estimate for doubtful accounts have on the income statement and balance sheet?

Lowering the estimate of doubtful accounts will cause the income statement to be overstated due to the bad debt expense being underestimated and net income will be higher. The balance sheet will be overstated as well because accounts receivable will be more.

$2.$ 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.

Lopez's recommendation to adjust the allowance for doubtful accounts is not within her rights as a manager. She should not be able to influence the accountant to where they would adjust that account so she could receive the bonus that is pleasing to her. Appears that she is the one benefiting from the adjustment.

$3.$ What type of internal control$($s$)$ might be useful for this company in overseeing the manager's recommendations for accounting changes?

Any recommendation for adjustments be made in writing and reviewed by the owner of the company. The accountant should be from an outside accounting firm. They should compare different estimating methods for the allowance of doubtful accounts and use the appropriate one.