Question 4

Study the scenario and complete the question that follow(s): You are a chartered accountant employed in the finance department of MedSupplies Ltd, a company that imports and sells medical supplies. The company Chief Executive Officer (CEO), Mr Barty Monroe accidently forwarded the following email to you (George Smith) that was meant for the Chief Financial Officer (CFO), Mr George Simpson.

From: Barty Monroe: bmonroe@medsupplies.co.za

Sent: 13 February 2021 2:53 p.m.

To: George: gsmith@medsupplies.co.za

Hi George, I have just looked at our figures for the past financial year I must say, I am IMPRESSED! It was an excellent decision to inflate the selling price on those low-quality face masks (you know I will never use one of those!). It sold like hot-cakes during the start of the COVID pandemic!

One problem, though: our financial year-end is approaching and that team of nosy auditors will be here soon. Hopefully, they wont ask too many questions!

You know, I have never been a fan of auditors, they raise all kinds of issues about the composition of our board of directors and committees. I firmly believe that as the CEO and member of the board of directors, I have to be part of every committee to properly run this business.

A few years ago, they informed me that there are rules regarding the frequency of meetings. I hate meetings! They are a waste of time once a year is enough! That is another reason, we have all males on the board of directors; the meetings are short and sweet!

Anyhow well done on those figures!

Barty

Comment on MedSupplies Ltds adherence to the King IV Report on Corporate Governance in South Africa, in light of the email sent by Barty. (15 Marks)