QUESTION 3

Question

a) Explain whether each of the scenarios is permissible in terms of the Code of Ethics
b) Discuss the role of the audit committee, King codes in ensuring governance in an
organization of your choice
c) Critically analyze the role and place of the internal audit activity in the
organizational plan of an organization. Use examples

Answer 1

a) In order to answer this question, we would need to know the specific scenarios being presented. Please provide the scenarios for further analysis.

b) The audit committee plays a vital role in ensuring good governance within an organization. It is responsible for overseeing financial reporting, internal controls, and audit processes. The King Codes of Governance for South Africa provide guidelines and best practices for corporate governance, including the role and responsibilities of the audit committee.

In an organization such as XYZ Company, the audit committee would be responsible for monitoring the financial reporting process, reviewing internal controls, ensuring compliance with regulations, and overseeing the external audit process. By providing independent oversight and guidance to the board of directors, the audit committee helps to strengthen accountability and transparency within the organization.

c) The internal audit activity plays a crucial role in the organizational plan of an organization by providing independent and objective assurance and consulting services. Internal auditors help to improve the effectiveness of risk management, control, and governance processes within the organization.

For example, in a company like ABC Corporation, the internal audit function would be involved in assessing the adequacy of internal controls, identifying areas of risk, and providing recommendations for improvement. By conducting ongoing assessments and evaluations, internal auditors help to mitigate risks, enhance operational efficiency, and ensure compliance with policies and regulations.

Overall, the internal audit activity serves as a critical component of the organization's governance structure, providing valuable insights and recommendations to help the organization achieve its objectives and maintain a strong control environment.