You are an audit manager for BWC an audit firm based in Muscat. You have just been asked by one of your existing clients, Alibaba Company, for help in compliance with corporate governance guidelines because they are about to obtain a stock exchange listing.

They have sent you the following information;

Mr. Anwar al Kalbani is the CEO of Alibaba company and there are currently 8 directors, only 3 of which have a non-executive role. At present the CEO is appointing all other board members. The two non-executive directors are proposed to set up an audit committee and nomination committee, however, Mr.Anwar al kalbani has completely denied their proposal and argued in the board meeting that there is no need for an audit committee and nomination committee.

In respect of the corporate governance of Alibaba Company,

a) Identify and explain any two corporate governance weaknesses in Alibaba company, also discuss your recommendation to address the weakness. (2marks)

b) Do you think the proposal to set up an audit committee and nomination committee by two non -executive directors is important? Yes/No? Also, discuss briefly the role of the audit committee. (1mark)