Question: The inventory manager's compensation includes a bonus plan based on gross profit. You discover that the inventory manager has knowingly overstated ending inventory by $2

The inventory manager's compensation includes a bonus plan based on gross profit. You discover that the inventory manager has knowingly overstated ending inventory by $2 million. What effect does this error have on the financial statements of the company and specifically gross profit? Why would the manager knowingly overstate ending inventory? Would this be considered an ethics violation?

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