You are an audit manager for a firm of accountants and you have been put in charge of the audit of Expansive Industries plc. You have been given the background briefing note so are aware of broadly what the company does, its directors and board structure and a summary of its financial performance. You are just beginning to understand and document audit matters and as part of your review you have been speaking to Financial Director Georgia Tickett and Head of Legal Mike Wong.

Mike Wong is worried about compliance with the UK Corporate Governance Code and the possible effect of any non-compliance on the auditors report and possibly the share price. Georgia Tickett is of the view that whilst there may be some what she calls technical infringements of the Code, these are easily explained as being for commercial reasons. She says she feels that a streamlined board makes it more responsive and hands on and less of a discussion forum.

She explained that they often have informal meetings between the four executive directors without inviting the non-executives. They make decisions at those meetings, which are then rubber-stamped at the monthly formal board meetings. She is also not worried about not having an in-house internal audit function. She says the accountants are perfectly adequate and are brought in when needed to investigate any particular issues the board or her department require.

1. Using the Code of Best Practice, explain with diagram the concept of TAPE related to the case study.

2. Georgia Tickett explained that they often have informal meetings between the four executive directors without inviting the non-executives. Assume that you are the manager of the company Show the degree of involvement of directors in strategy management.