You are a member of the audit team which has recently completed the audit of Twenty Twelve Limited (TwentyTwelve) for the year ended 30 April 2012.Twenty Twelve is listed on the NSX and invests and takes management responsibilities for businesses in the leisure industry in Southern Africa and overseas.Every year, the members of the audit firm stay in one of the resorts managed by the company for their annual partners' conference.

On 9 June 2012, the partner in charge of the audit attended the audit committee meeting during which the financial statements and other financial matters were discussed.The audit committee consists of the chairperson of the board of directors ofTwentyTwelve, the Chief Executive Officer (CEO), who also acts as the chairperson of the audit committee, the finical director, the operations director and one other executive director.The audit committee recommended that the financial statements be approved by the Board of Directors ofTwentyTwelve.

You were reading through a press release highlighting the excellent financial results ofTwentyTwelvefor the year ended 30 April 2012, when you received a phone call fromDanieMaree, the financial manager ofTwentyTwelve.Danny was clearly upset about something and wanted to discuss certain issues relating to the audit of which you were not aware, with you.Danny asked for advice on the following issues:

The financial director instructed the financial controllers of all divisions not to recognize certain trading expenses during April 2012.The affected expenses were therefore only recorded and paid during May 2012.Danny is also aware of the fact that the financial director was under tremendous pressure from the Board of Directors to meet certain earnings targets.As a result of positive external communications throughout the year, analysts, following the share price, expected a 30% increase in the earnings per share.

YOU ARE REQUIRED TO:

List and explain any specific corporate governance or ethical concerns apparent from the information above.Also, suggest how the concerns should be resolved in terms of available professional guidelines.

Corporate governance and ethical concerns and how these should be resolved.