Background Companies use off-balance sheet accounting so that they do not have t

Background
Companies use off-balance sheet accounting so that they do not have to include certain assets and liabilities in their financial statements. Off-balance sheet accounting is used to make the balance sheet look like the company has less debt.
Off-balance sheet accounting benefits companies as it eliminates both assets and debt from the balance sheet, improves companies’ liquidity ratios such as its current and quick ratios, and lowers leverage ratios such as debt to equity and debt to asset.
Scenario
You are a new accountant for a company and have discovered that the company’s management has formed a new corporation that will build a new corporate headquarters for the company and then lease the asset to the company on a 30-year lease, thus allowing the company to employ off-balance sheet accounting for the new assets. The arrangement will also allow management to make additional income from their new venture.
The Board of Directors are just now learning of this arrangement to employ off-balance sheet accounting for the new office building and of management’s profit arrangement from the new company.
Assignment
1.Ethical Breach
oExplain what loss Shareholders may have suffered because of management’s ownership of the off-balance sheet entity.
Board ReactionExplain why the corporation’s board of directors might believe that management breached the highest ethical standards.
Ethical ViewpointsUse at least two of the ethical viewpoints to address your company’s use of off-balance sheet accounting and management’s profiting from the arrangement. Specify the approaches you use. (see summary of ethical approaches below)
Discuss each requirement in separate paragraphs using subtitles to identify the topic.
Ethical Viewpoints: Consequentialist Theories
Ethical Egoism
Each person should act in his/her own self-interest.
Act Utilitarianism
. Each person should act in the way that produces the greatest happiness for everyone.
Rule Utilitarianism
Each person should follow rules that tends to produce the greatest happiness for everyone.
DIRECTIONS FOR SUBMITTING YOUR ASSIGNMENT
Submit a 2- to 3-page paper with an additional title page in current APA format.