Technology Company is one of the successful companies in the information technology field with a wide range of local and international customers. It was founded by Scott. The company is listed on the stock exchange market and has a board of directors that consists of five independent directors; two are from the academic field, two are from the information technology field, and one was a government employee. The board is chaired by Scott who is the CEO of the company. The board members are well-educated and have experience in the field of technology and accounting. One of the four big auditing firms audited the company's financial statements every year. The board of directors made their decisions based on the information presented by the chairman and the external auditors report. In 2021, Scott resigned and confessed that during the previous accounting periods, he reported inflated and non-existence cash transactions and understated liabilities on the statement of financial position. He also admitted that he reported false revenues to improve the profit margin. Moreover, he reported 20,000 employees in the companys report although the company has only 15,000 employees. He embezzled the salaries of the nonexistence employees. After Scotts confession, the company faced difficulties retaining its customers and continuing to operate.

a. Identify and explain the corporate governance issues in the above case.

b. Identify the theory(s) that explains the identified corporate governance issues.

c. What are your recommendations to the stockholders to solve the above issues?