Mel O\'Conner operates rental properties in Michigan. Each property has a manage
ID: 2558780 • Letter: M
Question
Mel O'Conner operates rental properties in Michigan. Each property has a manager who collects rent, arranges for repairs, and runs advertisements in the local newspaper. The property managers transfer cash to O'Conner monthly and prepare their own bank reconciliations. The manager in Lansing has been stealing from the company. To cover the theft, he overstates the amount of the outstanding checks on the monthly bank reconciliation. As a result, each monthly bank reconciliation appears to balance. However, the balance sheet reports more cash than O'Conner actually as in the bank. O'Conner is currently putting his entire business up for sale. In negotiating the sale of the business, O'Conner is showing the balance sheet to prospective buyers. Identify who, other than O'Conner, could be harmed by this theft. In what ways could they be harmed?Explanation / Answer
The prospective buyer who is going to purchase the business will have to suffer.
once the buyer purchase the business then it would become the responsibility of that buyer to correct all the wrongs done by the manager at Lansing.