Consider the following scenario and determine whether an agency conflict exists: Jacob and Kayla equally own and manage A New Beginning (ANB), a store that sells preowned clothing and furniture. Jacob is responsible for ANB’s back-office activities, and Kayla staffs the store and makes deliveries to customers. Both have equal decision-making authority and, under the terms of their partnership agreement, both are prohibited from making personal purchases using company funds without prior approval of the other partner. Jacob, without Kayla’s knowledge, used the company’s bank account recently to purchase a new sports car. Jacob has acknowledged that the car will not be used to support the business. Is this a potential agency conflict between Jacob and Kayla?
A. Yes; Jacob is misappropriating some of Kayla's wealth by unilaterally purchasing a nonbusiness asset using ANB's funds.
B. No; Jacob and Kayla co-own and co-manage ANB and have a partnership agreement that makes them equal, so an agency conflict cannot exist.
C. Yes; it should have been Kayla who purchased the car.
D. No; Jacob and Kayla are both authorized to spend ANB's money, so no conflict of interest can occur.