Answer: conflicts that arise in corporations should be addressed in the legal realm(A)
Explanation:
The principal-agent problem is an important part of the agency theory, the principal-agent problem views the firm as a connection of legal contracts.
In this perspective, corporations are seen merely as set of legal contracts that exists between the different parties. The conflicts that may take place are to be addressed in the legal realm.
Answer:
1. Could C.B. Management, Inc., prevail on its claim?
- probably it could since it was a common practice for McDonald's
2. C.B. Management, Inc. would be more likely to prevail if it could show that McDonald's terminated the franchise.
- arbitrarily, since it accepted other late payments from other franchisees.
Explanation:
In the original question, C.B. Management had a franchise contract with McDonald's but it continuously paid their franchise fees late. At the beginning McDonld's accepted the late fees but then it decided it wouldn't accept them anymore. Since late fees represented a breach of the franchise contract, McDonald's decided to terminate its contract with C.B. Management. In the first scenario, McDonald's was entitled to terminate the contract due to C.B. Management's continuous breaches.
What changes here, is that McDonald's generally accepts late payments from other franchisees and there acceptance of prior late fees meant that the original contract clause was invalid.
Auditors would likely prepare a
proof of cash in an event where the client has substantial control weaknesses
in cash receipts and cash disbursements, since a proof of cash would incorporate
separate columns for cash receipts and cash disbursements. The proof of cash
template is otherwise called the four-column bank reconciliation.
Application, Security and System.
