1. Based on the limited facts of this case, prepare a list of the operational issues to present to 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 issues related to the relationship between BTI and Randy Burnham & Co.
1. Working with potential biased audit firm.
2. Lack of internal controls
3. Lack of corporate governance
2. Do you think there are any ethical issues that should have been addressed by Carson and Boone before they hired Randy Burnham & Co. as their auditors? Be specific and explain why they should have been issues of concern.
There are numerous issues Carson and Boone have to address before they hire Randy Burnham & Co. First issue to address Willie Carson worked for Randy Burnham & Co. for 7 years, there is potential for biased feedback. Also, Carson wife works for Randy Burnham & Co. and was in charge of the audit for their company. Second issues they face there are no board of directors for Carson and Boone Company. With this issue there is lack of internal control and segregation of duties. Carson and Boone also compromise corporate governance without rules to separate ownership and control.
3. A fiduciary is a person who occupies a position of trust in relation to someone else such that this person is required to act for the latter’s benefit within the scope of that relationship. Discuss what fiduciary relationships exist in BTI and between BTI and its stakeholders. Also address the relationship between BTI and Randy Burnham & Co. be sure to include an explanation of the specific relationship of trust.
Carson and Boone establish a fiduciary relationship when Carson became the chief financial officer for the company. BTI build a fiduciary relationship with their stakeholders by sharing ownership of the company with a contract stating the stakeholders “would...
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