Assignment 1 Question 1 (COPC) (20 marks) Ubuntu Limited (Ubuntu) is an investment holding company listed on the JSE Securities Exchange and with interests in construction, engineering, manufacturing and property industries. You were recently appointed as audit manager in charge of the audit after the appointment of the previous audit manager as the head of internal audit at Ubuntu. A lack of major infrastructural projects in South Africa, as well as organisational restructuring costs, impacted negatively on the performance of the company in the first six months of the current financial year. This led to the departure of the previous chief executive officer, Anton Swart. The company managed to obtain the services of Joe Kemp, a chartered accountant who is well-known in the construction industry. The following conditions were set by Joe, and accepted by the board of directors, before his appointment: - The signing of a service contract that appoints him as chief executive officer as well as chairperson of the audit committee for the next five years. - Joe has the right to appoint one executive and two non-executive directors to the board of directors. - Joe will receive a fixed salary of R4 million per year for the next two years, whereafter a new package will be negotiated with the board of directors. - The scrapping of a share option scheme for non-executive directors. Joe immediately after his appointment embarked on a rationalisation and cost-cutting exercise. All scheduled training of employees for the next two years as well as the company's social spending project, that includes the building of schools in rural areas, were cancelled. Other actions that were taken by Joe include the following: - He dismissed the head of internal audit and appointed the previous manager on the audit of Ubuntu in his place. - He appointed a task team to facilitate the implementation of SAP to replace the existing accounting software package. He also invited you as the manager on the audit to attend the meetings of the implementation task team in order to provide input with regard to system specification and other issues. Your firm of auditors was also recently awarded the contract to implement the SAP system. You are currently busy preparing for the year-end audit of the company for the year ended 31 July 2017. REQUIRED: (a) Explain the inclusive approach to corporate governance adopted by the King Report. (2) (b) Discuss any ethical considerations regarding your attendance of the meetings of the SAP implementation task team as well as any ethical concerns regarding the implementation of the software by your firm. You should also indicate how any concerns could be resolved. (c) Discuss any other corporate governance or ethical considerations and concerns that you may have, based on the information provided. Where applicable, you should also indicate how your concerns could be resolved. Presentation (1)