Yes it's a misrepresentation and that's the whole point.

If B&M misrepresent things to the auditor it's unlikely they'll detect this. The auditor for B&M would not have access to the original contract between the previous owner of the store and the owner of the sets.

Audits just aren't that detailed. They might pick a few sample transactions or sample products to check in depth but every set in every store? Definitely not.

The comment I replied to insinuated an audit would lead straight to jail and I find that extremely unlikely. The likely outcome is a signed off audit, like at WireCard, ENRON, and WorldCom.