Many cases of fraud have been reported in the news in recent years. Large international companies, like Enron, WorldCom and Parmalat have been cited for fraud. The consequences for these firms were often fatal. In South Africa, examples of such companies include Leisurenet and Saambou. A respected judge by the name of Mervyn King has been appointed to set up the King Commission to form recommendations to prevent unethical practices from happening in future.

The King Commission has issued four reports to date, the second of which covered a Code of Corporate Practices and Conduct, commonly referred to as the King Code. The Code covers all aspects of good governance including accountability, transparency, and responsible management. It is advisable for every business to compile their own codes of conduct which should be aligned to their mission statements. Any business which does not have a sound and ethical relationship with their stakeholders, is likely to find that it will not be sustainable in the future.

REQUIRED:

$3\mathrm{.}3\mathrm{.}1$ Name two South African companies that have been involved in fraud scandals recently other than those in the passage. $(2)$

$3\mathrm{.}3\mathrm{.}2$ How many reports has the King Commission issued to date by referencing the answer from a journal you have researched from? $(1)$

$3\mathrm{.}3\mathrm{.}3$ What is the primary focus of the Code of Corporate Practices and Conduct, also known as the King Code?

$3\mathrm{.}3\mathrm{.}4$ What recommendation does the passage make regarding businesses and their codes of conduct?

$3\mathrm{.}3\mathrm{.}5$ Why is it important for businesses to maintain a sound and ethical relationship with their stakeholders?

$3\mathrm{.}3\mathrm{.}6$ What consequences did large international companies such as Enron and WorldCom face due to their involvement in fraud scandals?