Highfliers Ltd is a company listed on the JSE Ltd. You are a CA (SA) and the financial accountant at Highfliers Ltd. The companys Board of Directors and Audit Committee are comprised as follows: Board of Directors Perry Winkle Chairman & Chief Executive Officer (CEO) Dan Wire Financial director Frank Lee Human Resources director Terry Cotta Operations director Mark Eta Marketing director Barb Wire Non-executive director Polly Filla Non-executive director Audit Committee Perry Winkle Chairman Dan Wire Frank Lee Barb Wire Polly Filla Barb Wire is married to Dan Wire. Barb Wire and Polly Filla jointly own a fashion boutique. Dan Wire does the accounting work for the boutique, as neither Barb nor Polly has any accounting knowledge. Frank Lees only qualification is a diploma in Human Resource management. Frank has approximately two years experience and has never worked for any organization other than Highfliers Ltd. Frank ignores any financial documents and records that are given to him, as they simply confuse him. Both Perry Winkle and Dan Wire are registered as CA (SA)s with the South African Institute of Chartered Accountants (SAICA). Misleading financial information According to the SAICAs Code of Professional Conduct: A professional accountant in business is expected to present information fairly, honestly and in accordance with the relevant professional standards. Professional accountants in business have a duty of loyalty to their employers and should support their employers legitimate and ethical objectives. However, as employees, they cannot be required to be associated with any report that materially misrepresents facts. The company is tendering for a significant contract in order to provide a taxi service for the 2010 FIFA World Cup. Dan Wire is aware that the company will have difficulty securing the contract unless the assets are inflated on the Statement of Financial Position. Dan has instructed you to inflate the assets on the Statement of Financial Position by R2 million before submitting details of the companys financial performance and financial position as part of the tender application. YOU ARE REQUIRED TO: 1. Discuss whether or not the composition of the Audit Committee of Highfliers Ltd is in accordance with the recommendations of the King IV Report. Give reasons for your answer. (9) 2. In light of the Code of Professional Conduct issued by the South African Institute of Chartered Accountants, outline the action you should take in response to Dans instruction to inflate the assets.