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Growing Pains at Groupon Case 9. Groupon’s management needed significant cash to fund its growth. It had...

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Accounting

Growing Pains at Groupon Case

9. Groupon’s management needed significant cash to fund itsgrowth. It had three options:(A) seek private investment, (B) sellthe company to Yahoo! or Google, or (C) go public.

a. Contrast the financial reporting challenges across the threeoptions.

b. In March 2012, Groupon’s auditors noted a material weaknessin the company internal controls related to ‘‘deficiencies in thefinancial statement close process.’’ Would this disclosure havebeen made if Groupon had chosen options (A) or (B)?

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4.4 Ratings (730 Votes)
a Financial reporting challenges in case the company seeks private investment This option would have likely been the least challenging for Groupon from a financial reporting standpoint as they likely already produced GAAP financial statements for the use of the current owners creditors and or managers Private investors may want to see these statements and make a decision based on that information but it is highly unlikely that Groupon would be able to attract private investors that could raise the significant capital they were looking for to grow Also private investors would likely request additional information that would have to be createdprovided by the    See Answer
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