Request pose an ethical dilemma for the controller

Reference no: EM13156617

The controller of Ruiz Co. believes that the yearly allowance for doubtful accounts for Ruiz Co. should be 2% of net credit sales. The president of Ruiz Co., 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 Ruiz Co.

Instructions:

(a) Who are the stakeholders in this case?

(b) Does the president's request pose an ethical dilemma for the controller?

Reference no: EM13156617

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