4 QUESTION 2: CORPORATE GOVERNANCE AND AUDIT REPORT MADIBENG LTD You have been contracted by Conneli...

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4 QUESTION 2: CORPORATE GOVERNANCE AND AUDIT REPORT MADIBENG LTD You have been contracted by Conneli Chartered Accountants as a trainee accountant. They have audited the financial statements of Madibeng Ltd, and an extract of the audit report has been provided. The Chief Accountant, Connie has requested you to prepare a written report that will respond to the questions provided below: REQUIRED: 2.1 Briefly explain your understanding of 'good corporate governance'. (2) 2.2 Explain why a company must have their financial statements audited by an external auditor. (2) 2.3 Identify the type of audit opinion that was received by the company, provide a reason for your answer. 2.4 An investigation of the marketing expense mentioned in the audit report revealed that an amount of R180 000 was for a holiday for the CEO and his family that covered accommodation and air tickets. The bookkeeper was instructed to reflect this as a marketing expense. The CEO tried to convince the independent auditor to ignore this as it had been recorded in the financial statements. Explain why the independent auditor did not follow the request of the CEO. Provide TWO reasons. (2) (4) INFORMATION: EXTRACT FROM THE REPORT OF THE INDEPENDENT AUDITORS We have audited the annual financial statements of Madibeng Ltd for the year ended 28 February 2023. Financial statements are the responsibility of the company's directors. Our responsibility is to express an opinion based on our audit. International Standards on Auditing require that we perform the audit to obtain reasonable assurance that the financial statements are free of misstatement. Audit opinion The financial statements fairly represent the financial position of the company on 28 February 2023, except for the marketing expense in the Statement of Comprehensive Income which could not be verified, no documentation was provided to support this expenditure. Conneli Chartered Accountants (SA) 2024 Written Report - Grade 12 Question Paper 10 4 QUESTION 2: CORPORATE GOVERNANCE AND AUDIT REPORT MADIBENG LTD You have been contracted by Conneli Chartered Accountants as a trainee accountant. They have audited the financial statements of Madibeng Ltd, and an extract of the audit report has been provided. The Chief Accountant, Connie has requested you to prepare a written report that will respond to the questions provided below: REQUIRED: 2.1 Briefly explain your understanding of 'good corporate governance'. (2) 2.2 Explain why a company must have their financial statements audited by an external auditor. (2) 2.3 Identify the type of audit opinion that was received by the company, provide a reason for your answer. 2.4 An investigation of the marketing expense mentioned in the audit report revealed that an amount of R180 000 was for a holiday for the CEO and his family that covered accommodation and air tickets. The bookkeeper was instructed to reflect this as a marketing expense. The CEO tried to convince the independent auditor to ignore this as it had been recorded in the financial statements. Explain why the independent auditor did not follow the request of the CEO. Provide TWO reasons. (2) (4) INFORMATION: EXTRACT FROM THE REPORT OF THE INDEPENDENT AUDITORS We have audited the annual financial statements of Madibeng Ltd for the year ended 28 February 2023. Financial statements are the responsibility of the company's directors. Our responsibility is to express an opinion based on our audit. International Standards on Auditing require that we perform the audit to obtain reasonable assurance that the financial statements are free of misstatement. Audit opinion The financial statements fairly represent the financial position of the company on 28 February 2023, except for the marketing expense in the Statement of Comprehensive Income which could not be verified, no documentation was provided to support this expenditure. Conneli Chartered Accountants (SA) 2024 Written Report - Grade 12 Question Paper 10