Bubba Tech, inc (BTI) [Study Case]

QUESTION 1
Based on the limited facts of this case, prepare a list of the operational issues to present the top management at BTI. Include in your list any corporate governance issues of importance in relation to the management of BTI after it becomes a public company and any issues related to the relationship between BTI and Randy Burnham & Co.
ANSWER:
Referring to the case of Bubba Tech, Inc. (BTI), there are several operational issues to be presented to the top management at BTI which concerning the corporate governance and issue related to the relationship between BTI and Randy Burnham & Co. The operational issues that can be highlighted are the issue of working with potentially biased audit firm, lack of internal control and lack of corporate governance. The chief financial officer (CFO) of BTI, Willie Carson was once an employee of the Randy Burnham & Co., an accounting firm that is currently acting as the auditor for BTI. The relationship between Carson and the auditors from Randy Burnham & Co. may cause a conflict of interest. A conflict of interest is a situation in which private interests or personal considerations could affect or to perceived to affect both Carson and the auditors from Randy Burnham & Co. judgements to act in the best interests of BTI. The relationship of Carson and the auditors may influence the judgement and the decision relevancy that creates many of the conflict of interest problems in the business. For instance, Carson may ask the auditors favour to conceal the material misstatement found in the financial statement from the venture capital firm’s knowledge. Objectivity and integrity are essential qualities for employees of any organization. The affected result is not only the unqualified opinions rendered for the audited financial statements for previous years are arguable but also the