AUE2602_Semester 2_2024 Total: 40 marks
Assessment 2A: Memo
PART A 17 marks
Question 1
Identify six (6) corporate governance concerns in terms of the King IV Report on
Corporate Governance for South Africa 2016 regarding the audit committee as evident
from the information above and give reasons for your answer.
Reference: King IV Report on Corporate Governance for South Africa 2016; Richard,
Roets, Adams, Jonck & West (2023:4/2–4/56)
Concern Reason
DataTech held one Audit Committee The audit committee met once during the
meeting during the financial year year while it should meet twice a year. (1.5)
ending on 28 February 2022. (1)
Mr Appleton is both the marketing The audit committee is chaired by an
director and chairperson of the board. executive director whereas it should be
(1) chaired by an independent non-executive
director. (1.5)
Mrs Colt is an independent non- The members of the audit committee should
executive director with limited have the necessary financial literacy, skills
knowledge of IFRS, integrated and experience to execute their duties. (1.5)
reporting and internal controls. (1)
Miss Marks is the financial director The audit committee should only consist of
and also serves on the audit non-executive directors. The financial
committee. (1) director can attend audit committee by
invitation, but is not allowed to be a member
of the audit committee. (1.5)
The position of chief executive auditor The audit committee should appoint the chief
is vacant and the board is in the audit executive. (1.5)
process of appointing a chief audit
executive. (1)
Miss Marks highlighted that the The integrated reports are outstanding and
integrated reports for the previous two should be submitted to the audit committee
years were in process and that she for their inputs. (1.5)
would provide copies to the audit
committee once they had been
finalised and published. (1)
Max 6 x 1 = 6 Max 6 x 1.5 = 9 marks
Presentation marks:2
Max: 17
1
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