showcase the success of their strategies to stakeholders, has set aggressive financial targets, leading to a performance$-$

driven culture. There hav been whispers among the staff about the pressure to achieve these targets, sometimes even if

it means cutting a few corners.

Sales Transactions at CapeTown Essentials $($Pty$)$ Ltd

In the past fiscal year, CapeTown Essentials introduced a new promotional campaign to boost its online sales. This

campaign offered varying discounts to customers based on their purchase history and loyalty status. Additionally, a new

partnership was formed with a third$-$party logistics provider to expedite deliveries for online orders. As a result, the

company saw a significant surge in online sales, especially during the last quarter. However, the finance department

faced challenges in tracking and recording these sales due to the complexities introduced by the varying discount rates

and the involvement of the third$-$party logistics provider. Some customers reported discrepancies in their invoices,

especially related to the calculated discounts and VAT charges. Furthermore, there were instances where sales made at

the end of the month were recorded in the subsequent month. The company also introduced gift cards, leading to

situations where sales were recognized upon the purchase of the gift card rather than its redemption. The sales team,

eager to meet their aggressive targets, occasionally offered custom deals to big clients, which were not always

documented in the standard sales system but were instead recorded manually.

Property, Plant, and Equipment at CapeTown Essentials $($Pty$)$ Ltd

Over the past year, CapeTown Essentials has made significant investments in upgrading its infrastructure to support its

growing operations. The company acquired a new warehouse facility to store its expanding inventory, which is equipped

with modern security systems and climate control features. Additionally, to support its administrative and sales teams,

CapeTown Essentials procured a fleet of $200$ high$-$end laptops, each tailored with software suites essential for their daily

operations. The finance department also noted the acquisition of specialized machinery for the production department,

aimed at enhancing product quality and reducing manufacturing time. All these assets were capitalized and are being

depreciated over their useful lives. However, there have been instances where some laptops were reported missing or

damaged within a few months of procurement, and concerns were raised about the maintenance and handling of the

newly acquired machinery.

Answer ALL the questions in this section.

QUESTION $1$

$(10$ Marks$)$

Given the recent developments concerning Mr$.$ Siyabonga Khumalo, a Chartered Accountant overseeing the

financial operations at CapeTown Essentials $($Pty$)$ Ltd$.$:

a$)$ Identify which of the fundamental principles belonging to the SAICA Code of Professional Conduct Mr$.$

Khumalo may not have complied with.

$(5$ Marks$)$

b$)$ For each identified principle, provide a brief justification based on the provided scenario.

$(5$ Marks$)$I