1.

The possible reason behind this could be the lack of financial knowledge on Hue's chiefs and
leaders. It was mention that the shares are claimed by 15 people, for the most part relatives.
They may realize how to run and deal with the business as far as activities yet not as far as its
funds. It would be harder for the Board and leaders to understand the report of the Chief
Internal Auditor.

2. Hue should employ a Finance Director or a Controller who will oversee the end to end process
of accounting from recording transactions up to financial statements preparation. It will also be
a smart move for the company to establish an audit committee who will oversee the integrity of
the financial reporting of the company. They also oversee the external audit process and review
the internal controls of the company. The company could also set qualifications for these
directors so that they could properly perform their duties as part of the audit committee.

3. External auditors must be independence in fact and in appearance. In order to maintain this
independence, the external auditors should identify and address the risks that could impair
independence for example the when you are familiar to the client happens when the auditor
has a close relationship with the client. Another example would be if the audit manager is the
brother of the CEO.