ACCT305. What is the ethical issue?What should you,the controller, do?

ACCT305
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There have been revisions on the rules of accounting or accounting principles to curb any accounting malpractices. This has essentially been the reason for GAAP principles. Companies and accounting firms are nowadays under the legal obligation to report on the extents and types of leases that they have under their operations. This is because, based on the type and nature of the lease, various tax obligations come with it. Such financial obligations, therefore, have a subsequent impact on the balance sheets of these companies. The kind of lease agreement between ABC Company and XYZ Corporation about the lease of laser machines is one such arrangement.
What is the ethical issue?
The ethical issue, in this case, how the rules under GAAP operate do not fall in line with what is here. It is therefore unethical since a bargain-purchase option doesn’t exist in any of the GAAP rules, in cases to do with operating a lease. The unethical aspect of this is that there is a high chance of the leasee failing to properly record the assets. The main aim of GAAP regulations is to prevent any such financial misappropriations when doing business transactions that also involve assets. With this in mind, therefore, it would be unethical and hence wrong to follow the wishes of the boss, since it would result in misrepresentation of the leased asset as well as its liability, which would then have a subsequent impact on the books of accounts (Flood, 2015). For example, the net income might be affected since there is wrong reporting on the costs...