Envision is a public quoted company on a reputed stock exchange. As a listed company, Envision's policy manual provides that the internal audit team should prepare an internal control report every six months and report to the company's Managing director. Accordingly, the internal audit team had submitted their internal audit report to the Managing director without failing their duties. The company wanted to issue a prospectus inviting the public to subscribe to share issues to expand its businesses. The company filed the necessary documents to get approval from the stock exchange. The stock exchange delayed the approval and started investigating the company's books of accounts upon several complaints. However, two non-executive directors who felt about the over-gearing ratio upon grape wine (informal information) had raised questions about the company's liquidity and solvency. Still, the other four executive directors, including the Managing Director, had agreed with the explanations given by Mr. Smith for years. The company convenes its Annual General Meeting once a year. At the AGM, some shareholders frequently raised the issue of increasing labour turnover during the last five years. Most of the employees have resigned from the company to join the company's competitors. Further, some shareholders frequently raise the issue of non-adaptation to new technology. However, the majority of the shareholders who attended the AGM did not have sufficient interest in the issue of labour turnover, technology, solvency, and liquidity because the Board has proposed, and shareholders have approved dividends for years though there was no increase in their dividends. Shareholders always relied on the Managing Directors, Human Resource director, and Information director, who frequently uttered in their speeches that the market price of shares is increasing continuously because of new investments, information, and human resource. The stock exchange found that Mr. Smith, the managing director and the chief executive officer (CEO) of Envision company, had acted in collusion with auditors for years. They had been able to hide the company's liabilities worth more than the company's total assets in its subsidiary companies (Companies under the control of Envision company). When the fraud was disclosed, the share price fell by 50%. Shareholders requested the Board of directors to maintain an action against the CEO & Managing Director. Still, the Board has informed shareholders that Mr. Smith has acted for the company's benefit. Shareholders who are vulnerable with their investment seek your advice as follows .

1. Introduce a guideline with four points for the proper constitution of the Board. [8 marks]

2. Introduce a guideline for with four points for the audit and assurance procedure of the company [8 marks]

3. Can they maintain a court action against the CEO and the Managing Director [8 marks].