Suppose an unethical manager wanted to keep his firm’s net income as high as possible for a…

Identify risk and control. (LO 7)

Suppose an unethical manager wanted to keep his firm's net income as high as possible for a particular quarter to make sure he would get his bonus. The inventory manager has informed him that some obsolete inventory should be written off. What effect does writing down the value of the inventory have on net income? How will the manager respond to the inventory manager?

 

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