Kurt Hobbs owns apartment complexes in Columbus, Ohio. Each property has a manager who collects rent, arranges

Question:

Kurt Hobbs owns apartment complexes in Columbus, Ohio. Each property has a manager who collects rent, arranges for repairs, and runs advertisements in the local newspaper. The property managers transfer cash to Hobbs monthly and prepare their own bank reconciliations. The manager of one property has been stealing large sums of money. To cover the theft, he understates the amount of the outstanding checks on the monthly bank reconciliation. As a result, each monthly bank reconciliation appears to balance. However, the reports more cash than Hobbs actually has in the bank. While negotiating the sale of this property, Hobbs shows the to prospective investors.
Required
1. Identify 2 parties other than Hobbs who can be harmed by this theft. In what ways can they be harmed?
2. Discuss the role accounting plays in this situation.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...