Dr. Sally Jones is a practicing Orthopaedic Surgeon in Colorado. A trade show was attended by Dr. Jones, the managing director at the Sunset Medical, when consultation firm, Physicians Medical Inc. (PMI) approached him, with the aim to provide the billing and administrative services. Dr. Jones decided to collaborate with PMI and signed the contract on February 2019. Dr. Jones gave the day to day operational control to PMI. PMI fired the office manager from her duties and took control of the company. In 2020, the financial statements for 2019 were made public and were not as satisfactory as that of previous year. Dr. Jones was worried that the increased control given to PMI is a mistake and has asked PMI to give a full assessment of the situation. Even after earning more than $400,000 in additional revenue, Sunset’s cash was low during the year. Moreover, Dr. Jones had borrowed $200,000 during the year, out of which $100,000 was utilized to purchase an X-Ray machine.
After analysing the case two issues were bought in light:
Facts Pertaining to Issue
The facts that connects to the issues are the sheets that are provided in the case is exhibit 1. i.e the Income statement
The Fact pertaining to issue number 2 is Exhibit no. 3 where the authority and responsibility of Medical Management Inc. is provided.
Though nothing illegal is done by PMI with the financial statements. It can be concluded that the interim financial statements were used to persuade Dr. Jones which gave more control to the company. However, the responsibility given to PMI has actually decreased the internal control of Sunset. In regard to the contract with PMI can be rewritten according to the recommendation provided. It the teams are not suitable to the parties than that can even be terminated
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