SECTION A $[40$ MARKS$]$ Read the scenarios below and answer ALL the questions that follow. Johnathan Smith $($CA$)$SA$,$ a seasoned Chartered Accountant in public practice, faces several ethical and professional dilemmas in his diverse portfolio of clients. Consider the following situations: Audit Engagement with Oakwood Creations $($Pty$)$ Ltd Johnathan recently completed the audit for Oakwood Creations, a company specializing in handcrafted furniture. The agreed audit fee was R$200,000.$ However, since Johnathan$$s firm is growing and he needs to furnish it$,$ he proposed an alternative arrangement: Oakwood would provide Johnathan with furniture worth R$120,000,$ and the remaining R$80,000$ would be paid in cash. Johnathan would invoice Oakwood R$80,000$ for the audit. Johnathan suggested Oakwood doesn$$t raise a sale in the company$$s accounting records and rather write off the amount of R$120,000$ as part of the allowance for obsolete inventory. Advisory Services on King IV Compliance for Oakwood Creations $($Pty$)$ Ltd In addition to his auditing services, Johnathan Smith $($CA$)$ SA provides advisory services to Oakwood Creations $($Pty$)$ Ltd$.$ Oakwood is not listed and therefore not mandated by law to comply with the King IV Report on Corporate Governance for South Africa, however, the company has chosen to voluntarily adopt the King IV principles to enhance their governance practices. Johnathan's role includes evaluating and advising on the composition and effectiveness of Oakwood's board, ensuring that governance practices align with the principles of ethical leadership, corporate citizenship, and stakeholder inclusivity as outlined in the King IV guidelines. His advisory services aim to enhance the governance framework at Oakwood, promoting transparency, accountability, and sustainable performance.

Member of nominations committee Brother of CEO Tax Advisory for Greenfield Enterprises Johnathan assisted Greenfield Enterprises, a non$-$audit client, in a complex tax dispute. The agreement stipulated that Johnathan's fee would be $15\%$ of the tax savings, with a minimum charge of R$200$ if Greenfield lost the case. Greenfield won the case, resulting in significant tax savings. However, Greenfield's management is now contesting the high fee, deeming it disproportionate to the services rendered. Property Sale Negotiation for Silverline Holdings Johnathan facilitated the sale of a commercial property on behalf of Silverline Holdings. He charged a commission of $0\mathrm{.}5\%$ less than the standard estate agent fee. Despite this discount, Silverline$$s directors are questioning whether this fee structure is ethically appropriate for a Chartered Accountant. Answer ALL the questions in this section. Answer ALL the questions in this section.

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QUESTION $1(20$ Marks$)$ Discuss the concerns raised with reference to the SAICA Code of Professional Conduct with regards to the conduct of the Chartered Accountant, Johnathan Smith. For each of the concerns identify: a$)$ The category of threat$/($s$)$ b$)$ The fundamental principle$/($s$)$ under threat c$)$ Other considerations, if any. d$)$ One safeguard that will lower the identified threat to an acceptable level Use the following format to structure your answer addressing each identified concern: Concern #$1$ Identify the risk indicator in the scenario that is causing the concern, for example $$Software Sales Agreement with AccuTech$$ Category of Threat$/($s$)$ For example, self$-$interest and self$-$review threat Fundamental Principle$/($s$)$ under Threat For example, objectivity and integrity Other considerations For example, $$an assessment needs to be completed to determine how significant the value of the commission on software sales is in proportion to total firm revenue$$ Safeguard For example, $$cease all software sales immediately$$

QUESTION $2(20$ Marks$)$ Identify and analyse instances of non$-$compliance and potential non$-$compliance with the King IV Code of Corporate Governance for South Africa by Oakwood Creations $($Pty$)$ Ltd$.$ For each concern identified, clearly communicate which King IV principle is not being complied with or is at risk of not being complied with. Structure your answer as follows: King IV principle Explanation of non$-$compliance For example: Principle

$1$: The governing body should lead ethically and effectively. For example: The fact that the board of Oakwood is currently in discussions with the auditor of Oakwood regarding an illegal tax evasion scheme brings into question whether the board members possess the right values to be able to lead ethically and effectively.