Governance and Control 2A – 2018

SECOND ASSESSMENT OPPORTUNITY - REQUIRED

3 MAY 2018

FIRST EXAMINERS: MR R MOOSA

MS S VENTER

READING TIME: 20 MINUTES

WRITING TIME: 2 HOURS
INTERNAL MODERATOR: MRS R SMITH MARKS: 100 MARKS

INSTRUCTIONS:
1. This part of the paper consists of THREE pages. If your paper does not contain all the pages,
please put up your hand so that a replacement paper can be handed to you.
2. All the examination regulations of the UJ and the policy document for students of the
Department of Accountancy will apply during this assessment.

Page 1 of 3
QUESTION 1 45 MARKS
(54 MINUTES)

YOU ARE REQUIRED TO: MARKS

a) What is the definition of risk according to ISO 31000? (2)

b) Between the risk committee and the governing body, identify who remains
ultimately responsible for the management of risk of a company and explain why.
(3)
Consider the Companies Act & the Code of Corporate Governance for South
Africa (King IV) for your response.
c) Identify the four steps in the risk management process. (4)
d) Evaluate the Risk Committee of Perfect Pecan and conclude whether they are
compliant with the Code of Corporate Governance for South Africa (King IV) (9)
e) Identify and explain the business risks that Perfect Pecan faces as evident from
the scenario. (21)

Please structure your answer in the format below:

Risk Indicator Explanation of risk

f) Select the top 2 risks from your identified risks in (e), rank them and create a
PowerPoint slide as an aid to present to the Risk committee.

Make sure to add notes on the rationale you used to decide on the top two risks.
(6)
Also, create a second slide with a short list of the top three risks in a South
African context.

TOTAL MARKS (45)

QUESTION 2 12 MARKS
(14 MINUTES)

YOU ARE REQUIRED TO: MARKS

(a) In terms of section 45 of the Auditing Profession Act, give the definition of a
(5)
reportable irregularity?
(b) Assume that the information contained in the AGM notice, are the only actions
that occurred at the actual AGM. Discuss your concerns regarding this in light of
the minimum requirements that should be actioned at an AGM. (7)

TOTAL MARKS (12)

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QUESTION 3 (43 MARKS)
(52 MINUTES)

MARKS
YOU ARE REQUIRED TO:
(a) Define the term Internal control. (2)
(b) Following from the definition above, list the objectives that those charged with
(6)
governance wish to achieve with internal controls.
(c) Name and describe the function within the revenue and receipts cycle that will
assist Glamour to ensure that all customers that purchase on credit are
creditworthy. Your answer should include documents used within this function. (5)
(d) Name and describe the function within the payroll cycle that will assist Glamour
to ensure that all hired staff will have the required experience. Your answer
should include documents used within this function. (5)
(e) What are the characteristics of the inventory and production cycle? (5)
(f) What are the main activities in the investment cycle? (3)
Name the general controls that you would expect to be present in the business.
(g)
(5)
What are the programmed controls that the company should implement over the
(h)
terminal? (5)
What is an online computer system? (1)
(i) and
What are its characteristics? (4)
(j) What are the disadvantages, when using a batch processing system?
(2)

TOTAL MARKS (43)

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