PwC has resigned as external auditor of Oceana because of a "strained" relationship with the company, and a lack of transparent communication with the board, amid a tumultuous period at the troubled fisheries and logistics group. At the last annual general meeting, shareholders holding 38% of Oceana's shares voted against retaining PwC as the group's auditors. Oceana was meant to consult with shareholders on the reappointment of PwC on Monday, but instead announced on the day that PwC had resigned. "Shareholders are now advised that late afternoon, Friday (...) PwC resigned as auditors of the group with immediate effect in respect of the audit of the financial year ending September 2022." Oceana said PwC said this was "due to their assessment of significant doubt as to whether there was objective and transparent communication between the board and PwC given the strained relationship, which they assert constituted a significant impairment of their independence." Oceana was looking at alternatives to PwC, and discussions with another of the big four auditing firms were progressing. "The company is confident that it will be able to appoint new auditors within the required 40 business days." Monday's meeting will still go ahead in order to provide shareholders a chance to engage with Oceana's audit committee. Oceana owns canned fish brand Lucky Star and also has a presence in other global markets where it sells fishmeal, fish oil and fish. It also owns a logistics company specialising in cold storage and transport of products such as fish, fruit and vegetables, poultry and meat. The company delayed the publication of its financial results for the year-end September 2021 several times. That JSE previously warned that the company's listing would be suspended or removed if it didn't submit its annual report. The delay of its results was due to two accounting issues. The first concerns the accounting treatment of the group's 25% shareholding in New Orleans-based company Westbank Fishing. A whistleblower raised concerns about the treatment, which was investigated by ENSafrica. A preliminary probe found no evidence of "fraud, misappropriation or loss of funds or management of override of controls arising from any of the matters raised". Secondly, PwC raised concerns about the dating of signatures on an internal document relating to a $4 million insurance claim that was paid out to Oceana. The auditors were concerned whether the claim should have been recognised in the previous financial year. Chief financial officer Hajra Karrim was suspended in February, and CEO Imran Soomra resigned soon after that. Company secretary Adela Fortune also later left the company. Oceana previously said Soomra's conduct was being probed in order "to deal with certain of the matters which related to the CEO's conduct and which had been investigated or arose during the investigations conducted by ENSafrica Forensics".

Questions 1 (25 marks) Oceana reported that PwC said this was "due to their assessment of significant doubt as to whether there was objective and transparent communication between the board and PwC given the strained relationship, which they assert constituted a significant impairment of their independence." Discuss the auditing process that the PWC should be following and in which phase did Oceana identify the breach? Justify your response.

Questions 2 (25 marks) Summarise the relevant regulatory requirements that prevented PwC from continuing with their Audit Engagements?

Questions 3 (25 marks) Consider the following facts about Oceana as at 01 March 2023

Listed on the Johannesburg stock exchange and is based in South Africa Financial year starts on 01 March of every year.

Employs 120 workers at their factory including management and have no other employees on their books at end of February 2023

15 contractors were appointed starting in August 2022 & ends on the 15 March 2023

The annual revenue of the company was R22.5 million.

Took out a business loan of R20 million as a long-term loan in February 2022 for a plant expansion project

The company plans to onboard another 10 employees starting on the 01 March 2023

The company has 80 shareholders but 20 shareholders of them sold their shares on the 25th of Feb 2023. 10 shares were purchased by existing shareholders and the remainder were purchased by 30 new shareholders. All of these took place on the same day.

The Annual Financial Statement was compiled by an outsourced party as it has been for the last 10 years.

3.1 Calculate the Oceana's Public Interest Score as at the financial year ending 2022 based on the facts presented above using the Companies Act No. 71 of 2008 (New Companies Act) commenced on 1 May 2011? (15) Students must show how the score has been calculated.

3.2 Does Oceana have to undertake an audit of its Annual Financial Statement per the Companies Act No. 71 of 2008 (New Companies Act) commenced on 1 May 2011? (10) Justify your response

Questions 4 (25 marks) Oceana can be considered to be part of the Fast-Moving Consumer Goods (FMCG) and therefore generally relies heavily on substantial Inventories, Production, and Warehousing Cycle processes. Answer the following question based on Oceana.

4.1 Discuss the basic requirements that Oceana must have in place for its Inventory and Production Cycle? (9)

4.2 Summarise the documents used in the Inventories, Production, and Warehousing Cycle for Oceana? (16)