You are the audit manager of Sigma & Co and have been assigned to the audit of Tango Co a company which is planning to list on a stock exchange within the next 12 months. The listing rules of the stock exchange require compliance with corporate governance principles, and the directors are unsure whether they are following best practices in relation to this. They have asked the audit engagement partner for their view on this matter. Tangos board is comprised of six executive directors, a non-executive chairman, and three other non-executives (NEDs). The chairman and one of the NEDs are former directors of Tango and on reaching retirement age were asked to take on non-executive roles. The company has established an audit committee, and all NEDs are members including the chairman who chairs the committee. All four members were previously involved in sales or production-related roles. All of the directors have been members of the board for at least 4 years. As the chairman does not have an executive role, he has sole responsibility for liaising with the shareholders and answering their questions. The following additional deficiencies have been noted by the engagement partner, All directors have been members of the board for the last four years as Tango Co has not held an election in four years and the board is comprised of six executive and four non-executive board members. The company has not established an internal audit function to monitor internal controls.

Part A Based on the information given above, identify the areas of corporate governance deficiencies and explain how Tango Co can address these deficiencies before listing.

Part B The engagement partner has asked you to assess the make-up of the audit committee and provide a response with your findings including any suggestions on what Tango Co should do to ensure that their audit committee is adequately formed.

Part C The engagement partner has asked you to provide Tango Co with written advice; Outlining their responsibilities for internal control in accordance with corporate governance provisions . The benefits of establishing an internal audit function. The benefits of establishing an internal audit function.