The controller of Gomez Corporation believes that the company’s yearly allowance for doubtful accounts should be 2% of net credit sales. The president of Gomez Corporation, 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 Gomez Corporation.

Instructions
(a) Who are the stakeholders in this case?
(b) Does the president’s request pose an ethical dilemma for the controller?
(c) Should the controller be concerned with Gomez Corporation’s growth rate in estimating the allowance? Explain your answer.