Marks $30$

Read the Case Study below and answer ALL of the questions that follow.

Read the Case Study below and answer ALL of the questions that follow.

In the bustling city of San Francisco, in a sleek office overlooking the bay, GreenTech Innovations Inc. had been the talk of

the town since its inception in $2010.$ Founded by the charismatic entrepreneur, Clara Martinez, GreenTech was hailed as the

future of sustainable energy. With a vision to revolutionize the energy sector, Clara led her team to develop groundbreaking

sustainable energy solutions, propelling GreenTech to international fame.

The first five years were nothing short of a dream. The company expanded its wings, establishing footholds in Europe, Asia,

and South America. Their innovations were not just products$$ they were statements of a sustainable future.

However, as the sun set over the Golden Gate Bridge in $2017,$ dark clouds began to gather over GreenTech's horizon. The

global sustainable energy market, once a blue ocean, was now teeming with competitors. Giants from the tech industry

started pouring billions into R&D$,$ overshadowing GreenTech's efforts.

Determined to stay ahead, Clara made a bold move. She secured significant loans, betting on a new product line that

promised to be a game$-$changer. But technical challenges, akin to a twist in a thriller, delayed the launch repeatedly. The

mounting debt and interest payments became a ticking time bomb.

By $2020,$ whispers of GreenTech's troubles reached the market. Several key clients, once loyal patrons, terminated their

contracts, worried about the company's faltering steps. The corridors of GreenTech, once buzzing with enthusiasm, saw a

wave of resignations. Senior engineers, managers, the very pillars of the company, began to leave.

GreenTech's internal audit function, led by a seasoned auditor named Raj, had been instrumental in the company's early

days, ensuring processes were streamlined and risks were managed. However, with the company's rapid expansion, the

internal audit team faced challenges in keeping up$.$ Their team was understaffed, and there were concerns about their

training in the latest audit methodologies.

Raj reported directly to the CFO, a close confidant of Clara. This raised eyebrows in the industry, as it potentially

compromised the objectivity of the internal audit function. Furthermore, there were instances where significant findings by

Raj's team, especially related to inventory management and supplier contracts, were downplayed or not acted upon by the

management.

Raj's team had recently undergone a major reorganization, with several new members joining the internal audit function.

Their backgrounds varied, with some coming from non$-$audit roles within GreenTech, raising questions about their audit

experience.

The internal audit function had recently adopted a new audit software tool. However, there were teething issues, and the

team was still adjusting to the new system, potentially affecting the consistency of their work.

GreenTech had expanded into new markets with different regulatory environments. The internal audit team, while

knowledgeable about the U$.$S$.$ market, lacked expertise in some of these new regions.

Raj had expressed concerns about the limited budget allocated to the internal audit function, which restricted their ability to

attend relevant training programs and hire external consultants for specialized areas.

There were also reports of occasional disagreements between the internal audit function and the finance team, especially

when audit findings were critical of the finance processes.

The internal audit function had recently outsourced a part of their work to a third$-$party firm to cope with the increased

workload. The competence and objectivity of this third$-$party firm were yet to be assessed.

GreenTech's board had recently emphasized the importance of a robust internal audit function and had sought an external

review of the function's effectiveness. The results of this review were pending.

The financial statements revealed that GreenTech's current liabilities exceeded its current assets, indicating potential

liquidity issues. The company's debt$-$to$-$equity ratio had also surged, reflecting its increased reliance on borrowed funds.

Furthermore, the company had breached a few loan covenants, leading to some of its debt being reclassified as current.

Market analysts noted that GreenTech's market share had been steadily declining, and its brand reputation had taken a hit

due to the delayed product launch. There were also concerns about potential lawsuits from disgruntled investors alleging

misrepresentation.

Amidst the looming storm, Clara's determination was evident. She was not one to back down without a fight. Recognizing

the challenges ahead, she called upon her most trusted advisors and top management for a series of strategy

brainstorming sessions. The room was filled with a palpable sense of urgency an