Eric Thorman owns shoe stores in Halifax and Lunenburg. Each store has a manager who is responsible

Question:

Eric Thorman owns shoe stores in Halifax and Lunenburg. Each store has a manager who is responsible for sales and store expenses, and runs advertisements in the local newspaper. The managers transfer cash to Thorman monthly and prepare their own bank reconciliations. The manager in Lunenburg has been stealing large sums of money. To cover the theft, he understates the amount of the outstanding cheques on the monthly bank reconciliation. As a result, each monthly bank reconciliation appears to balance. However, the reports more cash than Thorman actually has in the bank. While negotiating the sale of the shoe stores, Thorman shows the to prospective investors.
Requirements
1. Identify two parties other than Thorman 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...