Scenario $1$

Tony Stark on the audit of Nissan found that an amount of R $1,6$ million in trade creditors owed to Bruce Wayne$($Pty$)$ Ltd$.$ This represents the purchase during August of a machine that manufactures electronic vehicle, specifically, SUVs that can travel $400$ km on a single charge. Bruce Wayne$($Pty$)$ Ltd is fully owned by Jordan Peterson and two of the four directors of Nissan who have no shareholding at Nissan.

Tony also found out the CFO at Nissan is Jordan Peterson$$s wife Sandra. She had negotiated the loan on behalf of Nissan. Moreover, she had assisted her son Derek to buy shares at Nissan at a lower price. After all she assisted in solving Nissans liquidity issues.

Tony was offered R$250000$ as a gift at the beginning of the audit engagement. Tony used half of the money to support a nearby orphanage and donated the rest for war victims in $$

Palestine. Tony found that all the source documents including purchase documentation, for example, a purchase order, delivery note, invoice and entries in the records, were correct. However, the Sandra$$s benefits were not disclosed in the notes to financial statements.

Scenario $2$

Hunter Biden, was selected to lead the audit of Ford $($Pty$)$ Ltd$.$ He found out the carbon emission in Ford was $60\%$ above what they disclosed. The CEO stated that this minor deviance was because of measurement errors. He also mentioned that he was close friends with government officials. He casually mentioned the disappearance of an auditor who $$did not know how to do business $.$ Furthermore, the company has made a number

of loans during the past year. Several bank transfers were made

One was a R$150000$ expenditure to the Bahamas which was documented as directors travelling allowance. This was spent by Paul, the managing director of Porche Ltd who also serves on the board of Ford$($Pty$)$ Ltd$.$

a$)$ Explain whether each of the scenarios is permissible in terms of the Code of Ethics

b$)$ Discuss the role of the audit committee, King codes in ensuring governance in an

organization of your choice

c$)$ Critically analyse the role and place of the internal audit activity in the

organisational plan of an organization. Use examples.