In accounting, allowance for doubtful accounts refer to the record of a part of a company that it expects might not be collected fully .Lowering or reducing the amount of doubtful debt accounts by increasing the amount of assets available for business ;while understand inside the building continues with the business of the day. Concerning the question on whether it wrong as a violation of ethics. This is because he can be paid unrealistic rewards as a result of such adjustments being made. Moreover, the roles of a manager do not include accounting roles; but to oversee the performance of the business in order to win their favor.
The recommendation by Steinmen to adjust the allowance for doubtful accounts is within her rights of duty as a manager and is in no way a violation of ethics. This is because on condition that her recommendation is in agreement with what various uninterested parties recommend; then it is within her rights as a manager. Moreover, as a manager, she should know much about what should be done; thus proving the legality of her actions.
In order to oversee the manager recommendation for all accounts changes, there should be internal controls to be used. This is meant to safeguard the assets of the company and moreover ensure credibility of the records. Some of the internal controls that can be used include periodic and independent document verification, separation of duties and procedures in the organization, sound personal procedures and ensuring records of all transactions are accurately. Moreover, access to accounting records should be controlled to ensure unauthorized parties that might make wrong usage of them are denied access
Would the allowance calculation be affected by the subsequent collection? If so, how?
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