Question 1

Who, and how many members should a

company's social and ethics committee

comprise of?

A social and ethics committee should

comprise of a minimum of any three

employees of the relevant company

B. A social and ethics committee should

comprise of a minimum of three directors, of

which at least one should be a non-executive

director of the company

C. A social and ethics committee should

comprise of at least three shareholders and

three non-executive directors of the company

D. A social and ethics committee should

comprise of a minimum of one member. who is

also a non-executive director of the company

Question 2

What does the King IV code recommend

boards practice regarding the adopting of a

stakeholder-inclusive approach

A. Stakeholders should be allocated a formal

and fixed time slot to raise concerns al all

AGMs

B. Shareholders have the right to contact the

company's external auditors should they have

queries regarding the integrated report

C. Powerful stakeholder groupings should be

represented on the relevant board

committees

D. The minutes of the AGMs of listed

companies should be made public

Question 3

pts

Chidori (Pty) Ltd had a public interest score

of 105 for their financial year. In terms of the

Companies Act, which requirement would

Chidori have to satisfy, to NOT have to be

audited?

O A. Chidori should prepare their financial

statements in accordance with IFRS for SME's

C B. Chidori should not trade with its shares on

the JSE

O C. Chidori should have their financial

statements compiled and prepared

independently

O D. Chidori should not have more than 50

Shareholders

Question 4

In which one of the following instances

would the relevant company not have to

have its financial statements audited nor

revlewed?

O A. Stark (Pty) Ltd has a public interest score of

62 and 100% of its shares belongs to one

shareholder who is a natural person and the

only director of the company. Stark

independentiy compiles its financlal

statements

O B. Quicksilver Ltd is a public company, which

has a public interest score of 55 and its shares

are equally owned by five shareholders

O C. Hulk Plant Hire (Pty) Ltd has a public

interest score of 77 and is a subsidiary of

Thanos Construction (Pty) Ltd

O D. Strange Construction CC has a public

interest score of 20, compiles its annual

financial statements internally and belongs to

six members

Question 5

Lama Civils (Pty) Ltd has 4 shareholders,

who are all also directors of the company.

Lama Civils had a turnover of R 150 million

for their financial year, and an average of

100 employees. Lama Civils compiles their

own financial statements. Which one of the

following statements with regards to Lama

Civils, is true?

A. Lama will need to be audited

O B. Lama will need to be reviewed but not

audited

) C. Lama need not bother to be audited or

reviewed

O D. Lama will need to be reviewed and audited

Question 6
In which one of the following scenarios

would Sana have to report an irregularity?

O A. Sana has identified a theft in her client's

petty cash, which involves one of the junior

creditor clerks of the company

O B. While performing an audit, Sana has

identined a fraudulent transaction in her

client's bank account, involving the company's

financial manager

C. Sana was notified by her client that one of

their ex-employees, a bookkeeper of the

company, created fraudulent cheques in the

name of the company, signed as the

authorized director, and deposited these

funds into her personal account

O D. One of Sana's client's operating managers,

mentioned that, due to a lack of internal

company controls, their diesel supplier had

been delivering diesel to them, while charging

for double deliveries

Question 7

It is one of the social and ethics committee's

responsibilities to moniter laws and

regulations relating to labour and

employment, and how the company is

complying with it. Which one of the

following options would be another example

or area that the committee would have to

monitor?

)A. The compliance with financial reporting

standards

)B. Maintaining good supplier relationships

)C. Dealing with external audit queries

)D. The compliance with consumer protection

law

Question 8

Which criteria do annual financial

statements have to adhere to, to be

classified as being prepared independently?

O A. The annual financial statements need to be

prepared by a person who has the knowledge

is not related to the relevant company in any

way, and who has been provided with the

financial information and records of the

relevant company, and who does so in

accordance with the financial reporting

standards

B. The annual financial statements need to be

prepared by the company's internal auditor,

who has been provided with the financial

information and records of the relevant

company, and who does so in accordance with

the financial reporting standards

O C. The annual financial statements need to be

prepared by an independent accounting

professional, who has been provided with the

financial information and records of the

relevant company, and who does so in

accordance with the financial reporting

standards

D. The annual financial statements need to be

prepared by a chartered accountant who has

access to the financial information and

records of the relevant company, and who

does so in accordance with the financial

reporting standards

Question 9

in terms of the Companies Act, which one of

the following documents is any for profit

company obliged to keep?

A. A copy of their auditors and company

secretary's IDs

B. A maintained copy of the company's

securities register

O C. A register of all the company

shareholders ‘names and ID numbers

D. Ail accounting and financial records for up

to five years

HLAA130-1 Legal Aspects of Accounting 2025 Jan -Jun

Student Number:

35HA2411023

Date and Time:

2025-05-29 - 09:03

securitles registe

BOSTON

C. A reaister of all the company's

shareholders names and ID numbers

()D. All accounting änd hnancial recrds for un

Account

to five years

Question 10

Which one of the following additions,

included in the relevant company's MOI, will

be deemed as being void, and in

contravention of the Companies Act?

A. Ica Ltd has included a provision in its MOI

which requires that 80% of the company's

board of directors must be present at the

AGM

B. Ica Ltd has included a provision in its MO

which requires of it to make use of two

different independent auditors to perform its

annual audit

O C. Ica Ltd has included a provision in its MOI.

which extends the date by which its annual

financial statements must, and can be

prepared
O D. Ica Ltd has included a provision in its MOI,

which prohibits its shareholders from

appointing a proxy for shareholders meetings,

where important matters influencing the

future of the company, will be discussed

Question 11

Which one of the following entities will be in

contravention of the Companies Act, with

regards to the liquidity and solvency test?

A. Raj (Pty) Ltd.'s total assets on its balance

sheet at their financial year end was R 38

million and their total liabilities, R 20 million

B. Sheldon Ltd.'s total fairly valued assets will

exceed their total fairly valued liabilities, after

their next dividend payment, 10 months into

their new financial year

C.Howard (Pty) Ltd's total assets on its

balance sheet at their financial year end was R

50 million and their total liabilities, R 45

million, right before paying out a declared

cash dividend of R 10 million to its

shareholders

D. Leonard Ltd has stopped trading, and is in

the process of being legally liquidated. The

company's reported fairly valued assets were

R 20 million and its liabilities, R 28 million at

its previous financial year end

Question 12
In which one of the following instances will

company A be a subsidiary of company B?

O A. Company B has the right to appoint 8 of the

directors on Company A's board, which

consists of 12 directors

C B. Company B's CEO is one of the directors on

the board of company A, along with 11 other

directors

O C.Half of company B's directors are

shareholders of company A

D. Company A has the right to appoint all the

directors on Company B's board of directors

Question 13

Which one of the following options will be

considered as being a characteristic of a

personal liability company?

A The company is controlled and managed by

O B. The company's name must include the

words ‘Personal Liability

O C. The company must meet the criteria of

private company

O D. The company is trading publicly with its

Question 14

Company X is a company which has been

incorporated for a public benefit, and its

assets and income are not to be distributed

to any of its members, directors,

incorporators or officers, except as a salary

According to the Companies Act, as what

type of company is Company X classified?

O A. A proft company

O B.A public company

C C.A non profit company

O D. Astate owned company

Question 15

Charles has applied to register his company,

Xavier School for the Gifted NPC. He has

provided the commission with all his

personal details and the company's

information. Charles made use of a template

MOI for an NPC, which he downloaded from

Google, and which he only had to update

with his necessary details. He furthermore

paid the required fee and filed a notice of

incor poration with the MOI Within a week

of his registration, Charles received a letter

from the commission stating that his

application has been rejected. Which one of

the following would be the most likely

reason why the commission has rejected his

application

A. Section 13 of the Companies Act states

that a non profi company must be

incorporated by three or more persons

B. Charles's company name does not compl

with section 11 of the Companies Act. and

would be deemed inappropriate

C. The MOI which Charles has used cannot be

used in accordance to section 15 of the

Companies Act

D. The fee paid by Charles does not comply

with the required fee for the specific

registration, according to section 13 of the

Companies Ac!

Question 16

In which one of the following instances

would the relevant entity pass the solvency

test?

O A. Liquid Moola (Pty) Ltd has a balance sheet

Indicating R 23 million in liabilities and R 20

million in assets

B. Slow Stable Ltd has not paid 50% of its

trade creditors in the last 12 months

C. Minnime (Pty) Ltd has a signed off set of

financial statements indicating R 5 million in

its bank, a net carrying value of R 5 million in

fixed assets, R 1 million in trade debtors and R

6 million in trade payables

D. Boris J Trading is undergoing liquidation

procedures

Question 17

When determining if a company is

complying with the solvency and liquidity

test, which one of the following items should

be considered?

O A. A company's total budgeted sales and cost

of sales over the next twelve months

O B. Any forceable contingent liabilities or

contingent assets

C. Any possible appointments of new

directors on a company's board

D. A company's public interest score and its

impact on the public in general

Question 18

The commission has reason to believe that

the directors of High-Table Trading (Pty) Ltd

has been trading recklessly, and has issued

the company with a notice to show cause of

why the company should be permitted to

continue carrying on its business. How long

does High-Table Trading have to satisfy the

commission that it is not contravening the

Companies Act?

O A. 30 days

B. 20 days

C.60 days

O D. 21 days

Questlon 19

In which one of the following instances

would the relevant company be allowed to

make a distribution

C A Hsnol Trading (Pty) Ltd's total assets were

R 23 million and its total liabilities R 24 million

CB. On the 1et of March 2019 Hsnol Trading

(Ptv) Ltd resolved that a dividend payout

should be made to its shareholders. The

payment was made on the 1st of March 2020

O C. Hanoi Trading (Pty) Ltd. approved a loan to

be made to one of its directors, by way of a

legal contract

O D. Hanoi Trading (Pty) Ltd. approved a

resolution that states that the company

complies with the requirements of the

solvency and liquidity test, and will still

comply after the distribution

Question 20

The board of Cruise Ltd have voted on

granting the company's Managing Director

financial assistance. Which one of the

following items will be deemed as financial

assistance in terms of the Companies Act?

A. The MD's monthly salary will be increased

to R 90 000.00

O B. The MD will receive a R 90 000.00 bonus at

the end of the financial year

C. The company will buy a new luxury car,

which will remain its property, and which the

MD will be allowed to use for business and

personal purposes
D. The company will pay a deposit on the

MD's new house, which she needs to relocate

to for company purposes, after which she wlll

need to repay it over three years

Question 21

Megan is a director of HR (Pty) Ltd. What

procedures need to be followed, to issue

shares to Megan?

O A. HR's board would have to approve the issue

with a special resolution

O B. HR's board would haye to approve the issue

with an ordinary resolution

C C.HR can issue the shares without following

any special procedures

O D. HR's MOI would have to grant

authorization of shares to its directors

Question 22

Eszray (Pty) Ltd has been approached by one

of its directors to provide them with a

personal loan, which will serve as a deposit

on a holiday home. The company's MOI does

not restrict any such loans, and the board is

satisfied that the terms of the loan are fair

and reasonable to the company. Which other

requirement should be adhered to according

to the Companies Act, before the loan can

be granted?

O A. The board needs to pass a special

resolution, and the loan granted and paid

within two years thereof

O B. The board needs to pass an ordinary

resolution, and the loan granted and paid

within two years thereof

O C. The director requesting the loan should

personally pass the solvency and liquidity

test, before and after the loan has been

granted

O D. The directors need to sign a formal written

agreement, stating the terms and repayments

of the loan along with its interest rate

Question 23

Which one of the following statements

regarding issuing of shares by a company, is

true?

A. The board of a company may issue shares

at any time, if authorized in the MOI

O B. The board can authorize shares at any time

O C. The board can issue shares in excess to

authorized shares, by passing an ordinary

resolution

O D. Directors will not be held liable for

authorizing any issued shares

Question 24
Which one of the following statements

regarding the keeping of a company's annual

financial statements in terms of the

Companies Act, is true?

O A. The company should keep copies of its

annual financial statements for at least five

years

C B. The company should keep copies of its

annual financial statements for at least seven

years

O C. The company's annual financial statements

need to be kept by a registered company

secretary

D. The company's annual financial statements

must be prepared one month after its

financial year end

Question 25

The boards of Cloverheld (Pty) Lid has

agreed that it will buy back shares from one

of its shareholders, who is not related to the

company. Which one of the following

procedures would the board of Cloverfield

need to perform, for the buyback to be

compliant with the Companies Act?

)A. The board needs to authorize the buyback.

by passing a special resolution

B. The board needs to ensure that Cloverfield

will meet the requirements of the solvency

and liquidity test, right after the buyback has

taken place

C. The board needs to vote on the matter at

the next AGM

D. The board needs to approve the buyback in

writing, and with a formal agreement with the

current shareholder

Question 26

What does it mean when a company's name

is followed by the abbreviated expression

(RF)?

A. The company is a public company with

listed shares

O B. The company's MOI contains certain

restrictions l.e. restrictions of trade

C. The company's rights to trade its shares has

been forfeited

O D. The company is liquid and has enough

reserve funds to cover its debts

Question 27

The shareholders of Abe's Odyssey Ltd are

holding a shareholders meeting, where they

need to vote on, and fill a vacancy on the

company's board. Half of the shareholders

will be attending the meeting electronically,

via Skype. What does the Companies Act

state, with regards to Abe's Odyssey's

scenario?

A. The shareholders who will be joining the

meeting electronically, will not be allowed to

vote on the matter

B. The shareholders will be allowed to join in

on the meeting electronically, and vote on the

matter, if the Skype method of doing so allows

them to act and communicate effectively

C. The sharcholders will have to be physically

present for the meeting, and not

electronically, due to the matter they are

voting on

D. The meeting will have to be postponed, as

all the shareholders would be required to be

physically present, due to the matter that is

being voted on

Question 28

What happens if the necessary quorum of a

shareholders meeting regarding the matter

being discussed, is not satisfied?

A. The matter discussed will automatically be

accepted

B. The matter discussed will automatically be

declined

C. The meeting will be postponed, without

further notice, by a week.

D. The meeting will be postponed without

further notice, by a month

Question 29

Boabab Ltd has sent out a notice to its

shareholders to notify them of the annual

general meeting. Which other document

must be included with the notice?

O A. A copy of the memorandum of

incorporation

B. A copy of the annual financial statements

)C. A copy of the following financial year's

budget

D. A copy of the company's latest annual

return

Question 30

In which one of the following instances must

a shareholders meeting be held?

A. David and Goliath (Pty) Ltd need to vote on

a special resolution

B. Lunar Ltd needs to elect a director to fill a

vacancy

C. Blue-steel Ltd have not had their annual

general meeting for the year yet

O D. Magnum (Pty) Ltd must vote on an

important matter

Question 31
Lennard, as one of the majority shareholders of a company, will not be able to attend a meeting
where a special resolution needs to be voted on. Which one of the following options can Lennard
follow in terms of the Companies Act?

• A. The meeting will have to be postponed until Lenard can attend it, as all the shareholders need
to be present to vote on a special resolution

• B. Lennard will have to appoint a proxy to attend the meeting on his behalf, to vote on the special
resolution

• C. Lennard can vote on the special resolution, in writing

• D. Lennard will have to forfeit on his vote, and would have to notify the company 15 days before
the meeting, of doing so

Question 32

_pts

Yuna's audit client has passed a resolution to amend their MOl. When inspecting the details of the
resolution, Yuna verified that 70% of voting right holders were present at the meeting when the
matter was voted on.

Has Yuna's client complied with the Companies Act, and what would the reason/s for compliance or
non-compliance be?

• A. Yuna's client has not complied, as the Companies Act requires that all shareholders need to be
present, when voting on an amendment which is to be made on the MOl

• B. Yuna's client has not complied, as the Companies Act requires that a special resolution be
passed when the MOl gets. amended, and that at least 75% of the company's voting rights would
need to be present to exercise votes on the decision

O C. Yuna's client has complied with the Companies Act, as only 50% of voting rights would have to
be present at the meeting to pass an ordinary resolution on the matter

O D. Yuna's client has complied with the Companies Act, as a resolution would not have to be passed
for the amendment of the company's MOI

Question 33

_pts

The secretary of Zoolander Ltd needs to prepare a notice of a shareholders meeting. which will be
sent to all its shareholders. In terms of the Companies Act, which one of the following options would
be a requirement, to be included in the notice?

O A. A register of all the names of the shareholders attending the meeting

• B. The company's management accounts for the relevant month

D C. A copy of the company's MOI O D. A date, time location and record date

Question 34
_pts

How long before a shareholders meeting begins, must the quorum requirements be satisfed?

• A. As soon as the meeting begins

• B. The quorum can still be satisfied while the meeting is held

O C. Fifteen minutes before the meeting begins

O D. An hour before the meeting

Question 35

_pts

Monalisa (Pty) Ltd has 10 preference shareholders, and 10 ordinary shareholders.

The preference shareholders equally share voting rights on discussing issues relating to national
projects, while ordinary

shareholders have rights to vote on both the national and international projects i.e.

National votes 20 shareholders;

International votes 10 shareholders. If Monalisa's MOl does not state any differently, which one of
the following combinations of shareholders need to be present at the meeting, when national
projects are voted on, before the meeting can begin?

O A. Preference shareholders - 2

Ordinary shareholders - 1

• B. Preference shareholders - 4

Ordinary shareholders - 1

O C. Preference shareholders - 2

Ordinary shareholders - 2

O D. Preterence shareholders - 1

1, Proference shareholders - 1

Question 36

_pts

Liquid Veg (Pty) Ltd has resolved and authorized that 10% of its net profits be distributed as
dividends to its shareholders.

How many days does Liquid Veg have to pay the declared dividends to its shareholders?

• A. 30 days

• B. 21 days
• C, 360 days

• D. 120 days

Question 37

_pts

In which one of the following instances would the mentioned director be held liable for any damages
or losses incurred by a company?

• A. Neil voted against the decision of the rest of the directors to collude with its competitors, to
raise prices of products provided to the public

• B. Tessa, the CEO, approved of a special resolution to provide financial assistance to one of her
company's directors, after the company passed the solvency and liquidity test, but ended up
suffering a loss due to the director not repaying the loan

• C. Morgan is a director of Viva Ltd and his brother held some shares in the company.

After finding out that the company would be making a loss on a contract, Morgan notified his
brother that the share price would plummet, and convinced his brother to sell his shares in Viva Ltd

• D. Kate notified her company's auditors that the rest of the board members were engaging in
fraudulent activities, which lead to the company being liquidated

Question 38

_ pts

In which one of the following instances would a special resolution be required in terms of the
Companies Act?

• A. The directors of Nico Ltd need to vote on a decision to undertake a significant project

• B. The management of Nico Ltd wants to issue shares to its CEO

• C. The management of Nico Ltd wants to Issue shares to the public to obtain funding

• D. The management of Nico Ltd wants to obtain funding by way of issuing bonds

Question 39

_pts

Which one of the following entities will be deemed as being ineligible to be the director of a
company?

Inbox

• A. Mongoose Ltd is holds controlling shares in

Earth-hog (Pty) Ltd

• B. Sam Masekela is a rehabilitated insolvent

• C. Walter White was released from prison six years ago

• D. Baloo is an 18-year old millionaire

Question 40

-pts

When will Section 112 and 115 of the Companies Act NOT apply to a proposal to dispose of the
greater part of a company's assets?

• A. Modern Ltd and Ink Ltd, are two subsidiaries that are wholly owned by the same holding
company. The board of Modern Ltd has proposed to dispose of most of its assets, by selling it to Ink
Ltd

• B. Mason Ltd is selling the greater part of its company's assets, which is made up of plant and
machinery, due to the company changing Its market and type of trade

• C. Pro Ltd is disposing of the greater part of its assets to cover its debts

• D. The board of Jericho Ltd needs to dispose of most of its assets, as the company is planning on
merging with one of its group companies

Question 41

_pts

BOSTON

Veriss 40010

Account

Dashboard

Courses

D and D Inc is an audit firm, and the appointed auditor of Harland Ltd. D and D Inc has two audit
partners, namely, Lloyd and Harry. Which one of the following statements with regards to the
rotation of auditors, the Companies Act, and Harland Ltd's audit, is true?

• A. D and D would be allowed to appoint a different audit partner as the registered auditor of
Harland Ltd every other year, e.g. year 1 - Lloyd; year 2 - Harry: year 3 - Lloyd; year 4 - Harry, etc

• B. D and D would be allowed to have Lloyd fill the position of the registered auditor of Harland Ltd
for five consecutive years, and then appoint Harry for the following five consecutive years

O C. D and D would only be allowed to remain the registered auditors of Harland Ltd for five
consecutive years, regardless of which partner will be appointed as the registered auditor, as
Harland appoints the firm, and not the audit partners
• D. Harland Ltd would have to appoint a new audit firm after every second year, as it appoints the
firm, and not the audit partners

Question 42

_pts

In terms of the Companies Act, which one of the following activities would be included in an
approved business rescue plan?

• A. Background checks on each employee of the company

• B. The appointment of a business rescue committee and its members

• C. The restructuring of debt and equity

O D. The revaluation of all fixed assets of the company

Question 43

_ pts

Within how many days after being appointed, should the relevant business rescue practitioner
publish his/her business rescue plan?

• A. 25 days

• B, 60 days

• C. 10 days

• D. 6 days

Question 44

Which one of the following tasks would form part of a company's secretarys mandatory duties,
according to the Companies Act?

O A. Submitting a company's completed annual income tax retums to SARS

O B. Ensuring that all the shareholders. directors and third parties entitled to. receives a copy of the
signed off annual financial statements

• C. Notitying all the company's directars of any meetings within the given time period

O D. Nominating the new auditors of a company when the position of auditors has become vacant

Question 45

-pts

Which one of the following statements regarding auditors and the Companies Act, is true?
O A An auditor must be rotated with a new or different registered auditor every two consecutive
years

• B. A new auditor must be appointed within five working days of a vacancy opening in a public
company

• C. An individual must be employed at an audit firm to be allowed to be appointed as a company's

auditor

O D. An auditor must not have been a director of the company they are being appointed to, within
the past five financial years preceding their appointment

Question 46

_pts

The shareholders and directors of Popeye (Pty) Ltd and Olive (Pty) Ltd are planning on an
amalgamation of the two entities. Which one of the following procedures needs to be adhered to,
before the amalgamation, for it to be deemed complaint with the Companies Act?

• A. The directors of the relevant companies need to prepare and sign an ordinary resolution

© B. The directors need to resign from their positions in their respective companies and be
reappointed as directors of the new company

O C. A written agreement needs to be prepared and signed which sets out the proposed
Memorandum of Incorporation of the new company which will be formed

• D. The companies need to repay all monies and debts outstanding to third parties

Question 47

- Pts

Nutty Foods Ltd is under business rescue, and as part of the business rescue plan. needs to sell the
greater part of its assets to a third party. Nutty Foods Ltd has proceeded with the transaction,
without passing a special resolution. Would Nutty Foods and the relevant parties be in contravention
of the Companies Act, and what would the reason/s be?

• A. Nutty Foods is in contravention of the Companies Act. as it is a requirement of the Act that the
disposal of all, or the greater part of a company's assets only gets done so, after a special resolution
has been adopted by a person entitied to exercise voting rights on the matter

• B. Nutty Foods is not in contravention of the Companies Act, as the transaction forms part of the
business rescue plan, which would exclude it from having to adopt a special resolution

• C. Nutty Foods is in contravention of the Companies Act, as they would only be excused from not
passing a special resolution, if they were selling their assets to its holding company, or another
subsidiary in its group
• D. Nutty Foods is not in contravention of the Companies Act, as it is not a requirement of a
company to pass any resolution when selling its assets, as it forms part of normal day to day
transactions of the company

Question 48

- Pts

Which one of the following statements, with regards to appointing auditors in compliance with the
Companies Act, is true?

• A A person who is disqualified from acting as a director of a company, would not necessarily be
disallowed to be an auditor of the company

O B. A Chartered Accountant does not have to be a registered auditor to be appointed as an auditor

of a company, meaning, an audit manager of a registered audit firm can be appointed as the
company's auditor

• C. The vacancy of an auditor must be filled by the relevant company, within 10 days of the position
becoming vacant

• D. An auditor, coming to the end of their annual appointment, can automatically be reappointed
without a resolution being passed at the AGM, If the auditor still meets all the requirements of being
an auditor of the company

Question 49

_ pts

Which one of the following tasks would be considered as being one of the audit committee's duties?

O A Performing internal audit procedures on

the company

• B. Determining the fees to be paid to the external auditors, and the external auditors engagement
terms

O C. Preparing the external auditors' report accompanying the annual financial statements

• D. Reviewing the external auditors' working papers

Question 50

_pts

Geo Ltd is in the process of appointing its new audit committee. Which one of the following
individuals would be allowed to be appointed as a member of this committee, in terms of the
Companies Act?

O A. George is a CA(SA) and the Managing Director of the company

O B. Derick is one of the financial managers of the company and holds a BCompt Accounting degree

O C. Sarah is a CA(SA) and non-executive director on the board of the company, and has not been
involved in the company's day to day activitles for the past three years

• D. Nina is the head of the Human Resources department of the company

Question 51

- Pts

Which one of the following statements is correct regarding King IV and combined assurance?

• A. The board and its committees should assess the output of the organisation's combined
assurance with objectivity and professional scepticism

• B. The board and its committees should assess the output of the organisation's combined
assurance with positivism and professional consultation

• C. The board and its committees should assess the output of the organisation's combined
assurance with trust and professional respect

O D. The board and Its committees should assess the output of the organisation's combined
assurance with objectivity and professional review

Question 52

_pts

Which one of the following statements regarding the rotation of auditors, the Companies Act and
the given scenario, is true?

• A. Lucas has been the designated auditor of Green Al Ltd for five years. Lucas would be allowed to
act as the registered auditor of Green Al for the 6th consecutive year, if Green Al's boards votes for
him to do so

• B. Micro Tech Ltd will be making use of their audit firm for the seventh consecutive year in a row.
Micro Tech's auditors will be allowed to use Dave as their registered auditor on Micro Tech's audit,
for his third consecutive year

• C. Sam was Airwolf (Pty) Ltd's registered auditor in 2018, but resigned from being their auditor in
2019. Airwolf was not satisfied with their new auditor's performance, and approached Sam in 2020,
to be reassigned as their auditor. Airwolf would be allowed to reappoint Sam as their auditor in 2020

• D. Lerato resigned as the auditor of Lesinu Mines Ltd in 2019, but rejoined the firm four months
after her resignation. Lerato will not be allowed to work as part of the audit team (not as the
engaging partner) of Lesinu's 2020 audit

Question 53

In the Companies Act, which one of the following statements best defines a financially destressed
entity in terms of business rescue proceedings?
_pts

O A. A company which will likely not be able to pay its debts within six months of these debts falling
due

• B. A company which would not adhere to the solvency test after providing financial assistance to
one of its directors

O C, A company which cannot settle a supplier account 30 days aftor falling due

O D. A company which adheres to the solvency ratio after it has been formed via a merger Question
54

- Pts

Nkatiseng is a registered business rescue practitioner, and has been assigned to assist Cradle Textiles
Ltd with their business rescue proceedings. Which one of the following statements regarding
Nkatiseng's position as business rescuer of Cradle Textiles, would be true?

O A Nkatiseng may delegate the process of constructing the business rescue plan to the financial
director or financial manager of Cradle Textiles

• B. Nkatiseng may remove Cradle's current hnancial manager, and appoint a financial manager
which she believes is more adequate

O C. Nkatiseng must obtain a special resolution from the board. if she has proposed to have a
director of the company removed, which she belleves, is not performing their duties

O D. Nkatiseng must discuss and obtain permission from the board, before acting and performing
certain procedures of the business rescue

Question 55

_pts

Clive is a registered business rescue practitioner with 12 years of experience, and viewed as one of
the most successful practitioners in the industry. Clive's son in law has approached him, seeking
assistance with his company's business rescue plan. It is a very large national company. They have
not started the proceedings yet, and he would like to appoint Clive, who is not involved with the
company in any way, to provide him with his services as business rescue practitioner. The company
has a public interest score of 520. Would Clive be able to act as his son in law's company's business
practitioner and what would the reason/s be?

• A Clive will be allowed to act as the business recue practitioner for his son in law's company, as he
is not directly related to the company, and has the necessary expertise to act the part

• B. Clive will not be allowed to act as the business rescue practitioner for his son in law's company,
as he has a relationship with his son in law due to adopted affinity, which might lead to an 'informed
third party' assessing that his integrity Is compromised

O C, Clive will be allowed to act as the business recue practitioner for his son in law's compony, by
delegating the relevant tasks of pertorming the procedures to experlenced staff mombors, but
managing it indirectly
• D. Clive will not be allowed to act as the business rescue practitioner tor his san in law's company,
as even though he has experience, he lacks three years of experience to handle a large company

Question 56

_ pts

Crescent (Pty) Ltd is in financial distress in terms of the Companies Act. In terms of the section of the
Companies Act relating to business rescue proceedings, which one of the following natural or juristic
persons can be considered an affected person?

O A. Stuart is a foreman of Crescent (Pty) Ltd, who did not receive his salary at the end of the month

• B. Becks Tool Supplies has received an order form Crescent (Pty) Ltd, but has not supplied any
goods to Crescent (Pty) Ltd

• C. Lion Inc Accountants and Auditors is the business rescue practitioner af Crescent (Pty)

Ltd

• D. Leah is the wife of one of the directors of Crescent (Pty) Ltd

Question 57

- pts

MMF Inc are registered accountants and auditors. One of their audit managers has been awarded
the title of CA, and has registered with IRBA. The directors have all agreed to promote him to a
director's position. Which one of the following requirements would MMF have to comply with, in
order for the appointment to be valid?

O A. They would have to distribute shares to the manager, in accordance with their MOl and the
relevant laws and regulations

• 8. They would need to appoint him as a director, in writing

• C. They would only need to adopt a resolution, containing the details of his appointment

• D. They will not be able to appoint him as a director, in compliance with the requirements of the
Companies Act

Question 58

_pts

Which one of the following entities would be prohibited from registering as auditors in

South Africa?

• A. Stanley and Lee have a partnership, and both are registered with IRBA

O B. Big Apple Inc. Is a firm of registered auditors and attorneys in New York, USA

• C, Beck's Auditing and Accounting Services is a registerod auditor and chartered accountant
OD. Dake Inc Accountants and Auditors is a company where every individunt is a shorcholder and
director of the company

Question 59

-pts

Account

Dashboard

Jay and Bob Attorneys were registered in terms of the Companies Act (Act No.61 of

1973). Their company met the criteria of a personal liability company, and still did, after the new
Companies Act came into effect.

One of the requirements for them to keep complying with the new Companies Act, was to amend
their name, if need be. Which one of the following company names would they be allowed to use, in
terms of the new Companies Act?

• A. Jay and Bob Attorneys (Pty) Ltd

• B. Jay and Bob Attorneys NPC

• C. Jay and Bob Attorneys Ltd

• D. Jay and Bob Attorneys inc

Question 60

_pts

Which one of the following questions should be asked, if a member of an assurance audit team
identifies a transaction which may possibly be a reportable irregularity, for it to be deemed as such?

• A. Did the transaction occur in the same financial year as the year under review?

O B. Is the transaction a material breach of

fiduciary duty?

• C. Is the transaction accurately presented in the financial records of the company?

• D. Does any person outside of the company know about the transaction?

Question 61

_pts

Jonathan is the audit partner on the assurance audit engagement team of Genoveva Ltd. Jonathan is
in the process of preparing the company's audit report.
Which one of the following options is one of the things Jonathan considers, before signing off the
audit report with an unqualified opinion?

• A What is the public interest score of Genoveva Ltd, and should the company be audited?

• 8. Have all the directors of Genoveva I.td signed the directors report?

• C, Is Jonathan satisfied that all the ascets and

liabilities disclosed in the financlal statemonts

of Genoveva I.td exist?

• D, Has Jonathan's name been spelt correctly in the fancial statements?

Question 62

_pts

shoard

In which one of the following instances is a company not allowed to use the term

"registered auditor", or "registered accountant and auditor® in their company or trading name?

• A. When it is an individual practicing as a sole proprietor

• B. When the relevant firm's members, or the individual is not registered with IRBA

• C. When the relevant firm's members, or the individual is not registered with SAICA

• D. When the firm employs administration staff, who are not registered with IRBA

Question 63

_ pts

Neville Kale is a chartered accountant, and is registered as such with SAICA. Neville has registered
the company Kale Inc CA and Auditor. Regarding the use of this company name, which one of the
following statements is true?

O A If Neville is not registered with IRBA as an auditor, he may not use this name for his company, as
it will create a false impression

O B. As long as Neville is a chartered accountant registered with SAICA, he is allowed to use this
name

• C. Neville cannot use this name if he is the only shareholder and director of the company

• D. For this type of company, Neville will not be allowed to use his surname in the company

name

Question 64

_ pts
Mendez Inc Chartered Accountants and Auditors notifed IRBA of a reportable irregularity committed
by their client.

Within how many days must Mendez notify their client's management of the report?

• A. 15 days

• B. 3 days

• C, 5 days

• D. 20 days

Question 65

_ pts

Which one of the following acts will be

considered as being unlawu!?

• A. Company A has unfairly dismissed one of its employees

• B. One of Company As employees were fatally injured, after he krasingly did not follow safety
procedures

O C. Company A's plant and machinery was overstated in its financial statements, after the valuator
performing the revaluation on the assets, made a material miscalculation

• D. Company A's employees worked on public holidays, after being given the decision to do

Question 66

_pts

Which statement regarding board performance is true?

A. The board should appoint a pertormance committce to evaluate its performance

• B. Institutional shareholders should independently evaluate board performance

O C. Specialised consultants with objective measures should evaluate board performance

• D. The board should assume responsibility for evaluating its own performance

Question 67

_ pts

Which one of the following statements regarding the auditor's duty to report a reportable
irregularity, is true?

• A. The auditor should only report a reportable irregularity, if he has concrete evidence that it has
occurred, or is occurring
• B. The auditor should not make use of, or rely on any source which provided him with information
on the irregularity, as it might constitute a breach in confidentiality

• C. The auditor should report a reportable irregularity as soon as they suspect its occurrence, and
make use of any source provided and available to them, which might lead, or has led them to believe
the irregularity is occurring

• D. The auditor is legally protected by the Act, even if he reports the irregularity without enough
grounds to do so

Question 68

_pts

When will an auditor be held liable to a gre party, who suffered damages or losses, after relying on
the opinion raised by the auditor. on the financial statements of the auditor's client?

O A Only it the auditor knew, or it the 3rd party can prove that the auditor knew that they (ard
party) would rely on the opinion, or knew

that his Cauditor) client wouid use the oplrion.

to induce the third party

• B. The auditor will be held liable for any opinion raised, and report signed oft, regardiess IFit can be
proved that he knew about the 3rd party's reliance, or not

O C. The auditor will be held liable, it the damages or loss made can be proven to be material of
nature

D. The auditor will be hold liable, if the loss or damages were caused due to fraudulent activities by
the suditor's client, and the auditor did not detect it during his audit

Question 69

_ pts

Natasha has notified her client's management team, that she has reported their deferring of
monthly VAT payments to the regulatory board. Natasha's client has rectified the matter, by
dismissing the manager who authorized the VAT submissions, rectified and resubmitted their VAT
returns, and paid all amounts due to SARS, including penalties and interest charges, within a week of
being notifed of the report. What is Natasha's responsibility regarding the matter, after her client
corrected the matter in this way?

O A. Natasha needs to provide her client with details of the regulatory person dealing with the
matter, and have them send through proof that the matter has been resolved

• B. Natasha should notify her client, that the matter cannot be rectifed, and that the regulatory
board will commence with liquidation and legal proceedings

• C. Natasha should notify the regulatory board with the details and evidence, that the irregularity
has been resolved, and is not occurring any longer
• D. Natasha should notify the regulatory board, of how material the irregularity was with regards to
the financial year under audit. and have them decide on which actions to take, regarding the matter

Question 70

_pts

Lema Robotics Ltd manufactures and sells robots. Which one of the following options is an example
of a material breach of the mentioned individual's fiduciary duty?

• A. Lema Ltd pays its CEO his monthly salary and a performance bonus, even if the company did not
perform as budgeted

• B. The CEO of Lema Ltd buys robots from Lema at its cost price, and sells it for profit as a side
business

• C. Lema Ltd's CEO was approached by a political party to support its campaign and gain an
advantage in tenders, but the CEO declined the offer

• D. Lema Ltd referred his son and law to Lema's

HR department for an open position in their factory. Lema's son in law passed all the necessary tests,
performed the best amongst all the other candidates, and was awarded the job.