What are the negative impacts that can happen

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Problem - Fiona Company is suffering badly with declining sales of its principal product. The president of the company, Robert Schmitt, instructs you, the controller, to lengthen asset lives to reduce depreciation expense. A processing line equipment, purchased for $3.5 million in January 2017, was originally estimated to have a useful life of 8 years and salvage value of $300,000. Depreciation has been recorded for 2 years on that basis. Robert wants the estimated life changed to 12 years total, and the straight-line method continued. What are the negative impacts that can happen if the unethical situation continues?

Reference no: EM132850272

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