SUBJECT: INTRODUCTION TO AUDITING

Question 5 (20 Marks)

Principle 3 of corporate governance indicates the following:

The board should ensure that the company is and is seen to be, a responsible corporate citizen. The introduction to the King IV Report states that being a corporate citizen is about a companys status in the broader society.and a corporate citizen has rights, but also obligations and responsibilities.

A detailed explanation of this principle is inclusive of the following factors:

The success of a company should not only be judged in terms of the financial performance of the company, but also in terms of the impact of the company on the economy, society and the environment, i.e. the triple context.

The company should protect, enhance and invest in the wellbeing of the economy, society and the environment, i.e. the triple context.

Being a responsible citizen for a company, means the establishment of an ethical relationship of responsibility between the company and the society in which it operates. Companies have rights, but they also have legal and moral obligations in respect of their social and natural environments.

Being a responsible corporate citizen and sustainable development are inseparable; a company which is an irresponsible corporate citizen, for example, one which does not treat its employees fairly, engages in illegal/corrupt practices and has no regard for the environment is sooner or later going to fail.

Being a responsible corporate citizen is far more than projecting an image and getting public relations right. It is about genuine commitment and leadership in the company, not a series of publicity stunts or a passing phase.

With reference to the factors that are taken into account in Principle 3 of corporate governance, you are required to provide TEN (10) examples of factors which a company should consider in relation to being a responsible corporate citizen and TEN (10) examples of how a company might act in relation to those factors.

NB: You should set your answer out as follows:

	Factor to be considered:	A good corporate citizen would:
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