AUD2B01 – Assessment Opportunity 2 – Required

FACULTY / COLLEGE College of Business and Economics

SCHOOL School of Accounting
DEPARTMENT Department of Accountancy
CAMPUS APK
MODULE NAME Auditing 200
MODULE CODE AUD2B01
SEMESTER Second
ASSESSMENT Second Assessment Opportunity

ASSESSORS Ms K Dempsey, Mr S Shiburi

MODERATOR(S) Mr P Lansdell, Ms M Ncalo, Prof B Marx
DURATION 135 minutes TOTAL MARKS 75

REQUIRED

Page 1 of 4
AUD2B01 – Assessment Opportunity 2 – Required

QUESTION 1 [35 MARKS]

1. Based on the information provided in "QUESTION 1 - BACKGROUND

INFORMATION", discuss and explain, with reasons, why you disagree with the
Human Resources Executive’s comment that:
“Being an RA and a CA(SA) is the same thing! It is just additional
membership/subscription fees to be paid. Besides, we can issue an audit opinion from
Fast and Furious (Pty) Ltd. There is no need to register a new company.” 5
2. Based on the information provided in "QUESTION 1 - BACKGROUND
INFORMATION", discuss and explain, with reasons, why you disagree with the
Chief Financial Officer’s comment that:
“Compliance with the CPC is easy – all we have to do is identify threats and implement
a safeguard for all threats identified”. 5
3. Based on the information provided in "QUESTION 1 - BACKGROUND
INFORMATION", discuss and explain, the auditor independence interventions
using:
1) The Companies Act no 71 of 2008 as amended by the Companies Act
Amendment Act no 3 of 2011 read with the Companies Regulations, 2011 as
amended;
2) Audit Tenure Rule as gazetted by the Independent Regulatory Board for
Auditors (IRBA) in the Government Gazette Nr 39475 of 04 December 2015;
and
3) Mandatory Audit Firm Rotation as gazetted by the Independent Regulatory
Board for Auditors (IRBA) in the Government Gazette Nr 4888 5 of June 2017. 5
4. Based on the information provided in "QUESTION 1 - BACKGROUND
INFORMATION", list the postulates of Auditing. 5

Page 2 of 4
AUD2B01 – Assessment Opportunity 2 – Required

5. Based on the information provided in "QUESTION 1 - BACKGROUND

INFORMATION" and "POTENTIAL NEW BUSINESS 1 - 3" with reference to the
South African Institute of Chartered Accountants (SAICA) Code of Professional
Conduct (CPC) and for all three scenarios,
 list the related fundamental principle and threat to the fundamental
principle that the registered auditors will have to consider. 5

Please note:
 Your answer should be presented in a table format as follows:
Potential new Fundamental Principle Threat
business (3 marks) (3 marks)
1
2
3

6. Based on the information provided in "QUESTION 1 - BACKGROUND

INFORMATION" and "POTENTIAL NEW BUSINESS 4" with reference to the Auditing
Profession Act 26 of 2005 as amended by the Auditing Profession Amendment Act,
No.2 of 2015 and the Auditing Profession Amendment Act 5 of 2021
1) Discuss, explain and conclude if the payment of bribes by All Star Catering
Solutions (Pty) Ltd constitutes a reportable irregularity; and
2) Discuss and explain the steps that the auditor will have to take if it constitutes
a reportable irregularity. 10

Page 3 of 4
AUD2B01 – Assessment Opportunity 2 – Required

QUESTION 2 [40 MARKS]

1. List and provide the responsibilities of the various stakeholders that form part of the
cornerstone of corporate governance. 8
2. Identify and discuss the corporate governance model adopted by Transnel. 8
3. List the objectives of the King IV Report on Good Corporate Governance in South
Africa. 4
4. Provided Transnel do away with the supervisory board and only remain with the 20
management board to serve as the only board, identify and discuss whether the
board will be compliant with Principle 7 of the King IV Report.

You are also required to provide the recommended principles and practices from
the King IV Report.

Your answer must be presented in a table format as follows:

Concerns King IV Guidance

***End of Required***

Page 4 of 4