1

SECONDARY SCHOOL IMPROVEMENT PROGRAMME

(SSIP) 2019

GRADE 12

SUBJECT: ACCOUNTING

LEARNER SOLUTIONS

(HIGH RISK)

SESSIONS 1 TO 6

(Page 1 of 22)

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TABLE OF CONTENTS

SESSION TOPIC PAGE

Companies
Financial Statements
Income Statement
3 -22
1-6 Balance Sheet
Cashflow
Analysis and Interpretation of Financial statements

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COMPANIES FINANCIAL STATEMENTS

INCOME STATEMENT
QUESTION 1

INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2018

Sales (2 456 000  – 50 000  – 6 000 ) 2 400 000 

Cost of sales 60% of sales (1 500 000) 
Gross profit 7 900 000 
Other income 550 790 
Service fee income (450 140  – 750 ) 449 390 
Rent income (119 200  – 17 800 )[1] 101 400 
Gross operating income 9 1 450 790 
Operating expenses (1 018 790) 
Directors' fees (375 000 – 15 000)[2] 360 000 
Consumable stores 54 100 – 1 400) 52 700 
Salaries and wages (354 800  + 16 000) 370 800 
Employer's contributions (53 560  + 1 920 + 160 ) 55 640 
Bank charges 15 340 + 1 310 ) 16 650 
Audit fees 45 000 + 9 600 ) 54 600 
Sundry expenses balancing figure 72 350 
Trading stock deficit (236 000 + 3 750 – 223 700 ) 16 050 
Provision for bad debt adjustment 800 
Depreciation (15 600 [3] [4] 19 200 
Operating profit If = 18% of Sales 32 432 000 
Interest income 15 200 
Profit before interest expense 447 200
Interest expense (38 300) 
Net profit before tax 408 900 
Income tax (102 225) 
Net profit after tax 6 306 675 

Calculations
[1] 119 200 – (900 x 8 = 7 200) = 112 000 ÷ 14 = 8 000+ 900 x 2 = 1 800 50
[2] 375 000 ÷ 25 = 15 000
[3] 372 000 – 72 000 = 300 000 – 144 000 = 156 000 x 10 ÷ 100 = 15 600
[4] 72 000 x 10 ÷ 100 x 6 ÷ 12 = 3 600

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QUESTION 2

2.1
2.1.1 D 
2.1.2 C 
2.1.3 A 
2.1.4 B 
4

2.2 MTOMBENI LTD

2.2.1 Calculate: Carrying value of the vehicle sold on 30 November 2016

100 500 three marks
190 000  – (72 000  + 28 500 ) = 89 500  one part correct
5
Calculate: Total depreciation on equipment on 28 February 2017

New:
32 000  x 6/12  x 10% = 1 600  one part correct but not for 10%

Old:
133 000 two marks
= (218 000 – 85 000) x 10% = 13 300  one part correct but not for 10%
(250 000 – 32 000) one mark

Total = 14 900  one part correct

7

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MTOMBENI LTD
Income Statement (Statement of Comprehensive Income) for the year ended
28 February 2017: *one part correct

Sales (5 500 000 – 32 500 +15 000 ) 5 482 500 *

Cost of sales (3 150 000 + 9 375 ) (3 159 375) 
Gross profit 6 2 323 125  Sales
- COS

Other operating income 198 950 *

Rent income (169 500 + 16 500 ) 186 000 *
Bad debt recovered 4 750 
** Profit on sale of asset (97 700 – 89 500 see 4.2.1 ) 8 200 *
Gross operating income 10 2 522 075 *
Operating expenses (1 356 075) *
Directors' fees 380 000
Audit fees 54 000
Bad debts (13 600 + 1 900 ) 15 500 
Salaries and wages 488 500 two marks 1 755 two marks
490 255 *
(475 000  + 13 500 + 1 620  + 135 
Consumable stores 61 700 
Insurance (19 220 + 1 780) 21 000 
Bank charges (7 760  + 870 ) 8 630 
Sundry expenses 140 085 
** Trading stock deficit (386 500 – 9 375  – 374 000 ) 3 125 *
R12 500 two marks only see cost of sales
** Provision for bad debts adjustment (4 030 – 3 650) 380 
Depreciation (28 500  + 138 000  + 14 900) 181 400 *
see 4.2.1 see 4.2.1

Operating profit 30 1 166 000 GOI-

OExp
Interest income Missing figure NP after Interest income – Operating profit
178 000 
Cannot work out to be a negative figure

Net profit after interest income NPBT + Interest expense 1 344 000 
Interest expense (144 000) 
Net profit before tax NPAT + Income tax 1 200 000 
Income tax (336 000) 
Net profit after tax 8 864 000
TOTAL MARKS
70

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QESTION 3 CORRECTION OF NET PROFIT BEFORE TAX

Correction of profit before tax

Incorrect Profit before tax 840 000

Trading stock surplus (450 700 – 5 700  – 446 000) 1 000

Depreciation ( R40 000 + R34 000)  (74 000)

Bad debt ( 4 600 x 60/100)  (2 760)

Provision for bad debts adjustment(9 000 - 8 662)  338

Income received in advance( Rent income)  (5 450)

Expense Accrued ( Audit fees)  (6 750)

Expense prepaid ( Directors fees)  (40 000)

Income tax( 280 000 + 12 300)  (292 300)

Net profit after tax  420 078

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QUESTION 4
4.1 Write only the letter (A–E) next to the question number.
4.1.1 E

4.1.2 C

4.1.3 D

4.1.4 B
4

4.2.1 See Income Statement on the next page.

4.2.2 Ordinary Share Capital Note

Authorised
1 000 000 ordinary shares
Issued
700 000 Shares in issue on 1 Mar. 2014 5 600 000 (x)
Shares issued during the year at
100 000 1 200 000 (y)
R12 each
Shares bought back (average (1 360 000)
(160 000)
Ignore brackets issued price of R8,50) Not R9,10
One part correct
If (x+y) ÷ 800 000 Ignore brackets

 5 440 000
640 000 Shares in issue on 28 Feb. 2015 Operation;
One part correct

4.2.3 Retained Income Note

Balance at beginning of financial year  1 368 000

Net profit after tax see 4.2.1 1 260 000
if 910-avg price above
Buy back of shares (160 000  x 60c ) * (96 000)
Ignore brackets

Dividends * (1 080 000)

Ignore brackets
 Interim (700 000 x 80c) Regard 80c as part of workings
* 560 000
to assess if one part correct for final method mark

 Final (800 000  x 65c) Regard 65c as part of workings to * 520 000
assess if one part correct for final method mark

Balance at end of financial year * 1 452 000

*Operation one part correct
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4.2.1 PRINCE LIMITED

*Operation, one part correct

INCOME STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2015

20 963 600 (2 marks)
Sales (14 974 000x140/100– 53 600) * 20 910 000
Cost of sales (14 974 000)
5 Gross profit * 5 936 000
Other income * 355 700
Rent income (374 950 – 29 500) * 345 450
28 075: 1 mark; 1 425: 1 mark
Bad debts recovered  4 150
Provision for bad debt adjustment  6 100

9 Gross operating income * 6 291 700

Operating expenses Operation; Gross operating income – operating profit (4 195 900)
If no brackets, just mark operation

Auditors' fees 147 600

Advertising 960 000
Salaries and wages (1 300 000 +17 000+ 3 000) * 1 320 000
20 000: 2 marks
Directors' fees (1 130 000 + 20 500)  1 150 500
Packing material (76 200 – 8 500)  67 700
Sundry expenses Balancing figure; any reasonable figure  164 900
Bad debts (24 000 + 42 000)  66 000
Trading stock deficit  20 000
Depreciation  299 200

19 Operating profit Operation; Subtotal-Interest income  2 095 800

Interest income (53 260 + 25 940) or 990 000 x 8% * 79 200
2 175 000
Interest expense Ignore brackets;  (375 000)
Ignore operation as NPBT is worked out from tax
Net profit before tax If NP + tax 1 800 000
Income tax (540 000)
9 Net profit after tax 1 260 000
42
Foreign items -1; max -2 Misplaced items to be marked as incorrect

TOTAL MARKS
65

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COMPANIES : FIXED ASSETS, BALANCE SHEET AND AUDIT REPORT

QUESTION 5
5.1
(a) Calculate the carrying value of Land and Buildings on 1 March 2016.

2 550 000 – 325 000 = 2 225 000  no part marks

2
(b) Calculate the total depreciation on vehicles on 28 February 2017.
Allocate the marks to correct workings even if subtotals not shown.

New:
422 550 x 20/100 x 6/12 = 42 255 

Old: one mark

350 000 x 20/100 = 70 000 but can only write off R34 999 
(350 000 – 315 000) = 35 000–1 = 34 999
42 255 + 34 999 = 77 254  one part correct
6
(c) Calculate the carrying value of Vehicles on 28 February 2017.
Note: Apply Marking Principle10
Mark one line only – choose line to benefit candidate

see (b) above one part correct

35 000  + 422 550  – 77 254  = 380 296 

OR
one mark one mark one method mark one method mark
772 550 – (315 000 + 77 254 see (b) above = 380 296
392 254 two marks
4
(d) Calculate the carrying value of Equipment sold on 31 December 2016.
Note: Apply Marking Principle10
Mark one line only – choose line to benefit candidate

30 900 four marks 18 900 three marks

22 800 two marks
120 000  – (12 000 + 10 800  + 8 100 ) = 89 100  one part correct
108 000 two marks
OR
one mark one mark one mark two marks one method mark
120 000 – 12 000 – 10 800 – 8 100 = 89 100
6
(e) Calculate the total carrying value of fixed assets on 28 February 2017.
Note: Apply Marking Principle10

see (c) above one part correct

2 550 000  + 380 296  + 50 994  = 2 981 290 
4

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5.2 BALANCE SHEET OF ODETTE LTD ON 28 FEBRUARY 2017

Accept -ve figures for balancing items if these are due to prior errors by the candidates
Ignore foreign items Placement presentation – 1 if marks earned in each case
ASSETS 
NON CURRENT ASSETS (TA – CA) 4 010 940 
Fixed assets See (3.1 e) 2 981 290 
3 Financial assets (Fixed Deposit) 1 029 650 
Non-current assets – Fixed assets

CURRENT ASSETS CL X 2,1 870 660 

Inventory 408 880
Trade and other receivables 84 080 *
67 200  – 270  + 6 800 +10 350 
Cash and cash equivalents 377 700 
CA – Inv – T & OR

12 TOTAL ASSETS SHE + L 4 881 600 

EQUITY AND LIABILITIES

SHAREHOLDERS EQUITY 675 000  x 620 c  4 185 000 
900 000 x 75%

Ordinary share capital SE – 520 000 3 665 000 

4 Retained income 520 000

NON-CURRENT LIABILITIES 282 000

Loan: Beque Bank
376 000–92 000
4    282 000 *
284 000 + 48 000 – 50 000
332 000 two marks

CURRENT LIABILITIES 414 600 *

NB: See alternative
version to allow for
SARS as a T&OR

# Trade and other payables 184 000 + 5 600 189 600 *

## SARS: Income tax 222 000  – 209 000  13 000 *
518 000 x 30/70
See no. of shares in SHE
Shareholders for dividends (675 000  x 0,24) 162 000 *
Current portion of loan 50 000 
14 TOTAL EQUITY AND LIABILITIES 4 881 600 * 37
*one part correct
#Trade and other payables can combine the other elements under current liabilities. Allocate the part-marks accordingly.
If SARS and S/Hs for divs are included in T&OP, award one method mark in each case for workings included.
## Inspect treatment of SARS (income tax) to check if candidate deducts interest from net profit to calculate tax

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5.3 AUDIT REPORT

As a shareholder, what concerns would you have regarding this audit

report? Explain THREE points.

Any three different valid points   

Part-marks for unclear/incomplete explanation

Note: Candidates should not restrict responses to the commenting on the two specific points in the audit report as
there would be several concerns arising from those two points.

Expected responses:
 This is a disclaimer report (no audit opinion).
 It will have a negative effect on the company e.g. reputation / share price
/ demand for shares / bad publicity / potential investors lose confidence in
the company.
 The corporate governance of the company is compromised /not in line
with King Code.
 The correct procedure of approving directors' fees / bonuses was not
followed.
 The directors have abused their position.
 The huge amount paid to directors could negatively affect the financial
results/liquidity and solvency/profitability of the company.
 Insufficient audit evidence.
6

TOTAL MARKS

65

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QUESTION 6

6.1
6.1.1 True 
6.1.2 False 
6.1.3 True  Accept abbreviations for T or F

6.1.4 False 
6.1.5 False 
5

6.2 MODISE LTD

6.2.1 RETAINED INCOME Ignore foreign items; presentation -1 max

Balance at beginning of year R567 000

Funds used for shares repurchased (250 000 x R0,25)  (62 500)*
Ignore brackets

Net profit after tax (3 400 000  – 918 000 )  2 482 000
or 3 400 000 x 73% Operation, one part correct

Ordinary share dividends Operation, one part correct

 (2 400 000)*
Ignore brackets

Interim  672 000

Final (4 800 000  x 36/100 ) or 36 cents or 0,36
 1 728 000
(4 550 000 + 250 000) Operation, one part correct

Balance at end of year Operation, one part correct  586 500

* figures must be subtracted 12

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6.2.2 MODISE LTD

BALANCE SHEET ON 28 FEBRUARY 2018
ASSETS
Non-current assets Operation, TA - CA  13 386 500
Fixed assets Operation, balancing figure  12 666 500
*Fixed deposit / Investments / Financial assets
(48 000 x 12/10 x 100/8) Operation, one part correct  720 000 (7)
Be aware of alternative methods of calculation

Current assets No part marks (2 600 000 x 1,5)  3 900 000

Inventories (1 015 000  + 25 000 )  1 040 000
*Trade and other receivables Operation, one part correct
 540 000
(554 000 – 33 240 +19 240)
* Cash and cash equivalents Operation, balancing figure  2 320 000

TOTAL ASSETS See total for E + L  17 286 500 (14)

EQUITY AND LIABILITIES

Ordinary shareholders’ equity 14 236 500
Operation, one part correct (i.e. RI figure from note): OSC + RI

Ordinary share capital 13 650 000

* Retained income See 4.2.1; could be -ve;  586 500 (3)

Non-current liabilities 450 000

* Loan from director (630 000 – 180 000 ) or 12/42  450 000 (5)
15 000 x 12 Operation, one part correct

Current liabilities 2 600 000

Trade and other payables operation, balancing figure # 674 000
Shareholders for dividends See 4.2.1 1 728 000
See 4.2.1 or 3 400 000 x 27%
SARS: Income tax (918 000– 900 000 ) one part correct
 18 000
* Loan (current portion) see above  180 000

TOTAL EQUITY AND LIABILITIES Operation, See OSHE + NCL + CL  17 286 500 (9)

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14

6.2.3 The directors want to give R500 000 to a local school.

Give TWO reasons why companies take such decisions.
Any TWO valid reasons   Part-marks for unclear / incomplete answers

 This forms part of their corporate social investment (CSI) / responsibility

(CSR) in accordance with the King Code
 Leads to goodwill from the community (support/positive image/good
publicity)
 Creates a safer environment for the school / Contributes to better facilities
for learners
 Tax deductible 4

6.3 AUDIT REPORT

6.3.1 Briefly explain the role of an independent auditor.
ONE valid explanation:  Part-marks for unclear / incomplete answer

 The independent auditor expresses an opinion on the fair presentation of the

financial statements
 Protects the interests of the shareholders/public.
Expected responses for max of 1 mark:
 Checks the books/Internal control/Detects fraud 2

6.3.2 Did Denga Limited receive a qualified/unqualified/disclaimer of opinion

audit report?

Qualified report  May be underlined in answer book

Briefly explain your choice. Mark independent of the decision above

Explanation  Part-marks for unclear / incomplete answer

Valid responses for two marks:
 The audit opinion expressed an exception whereby it qualified the report
regarding the shortcoming/exception in the case of advertising
 Advertising expenses of R500 000 could not be verified. 3

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6.3.3 State THREE possible consequences for the independent auditor if he had
NOT mentioned the advertising expense in his report.
Three different consequences   
 Disciplinary hearing (IRBA)
 Arrested (if fraud)
 Deregistered / struck off the roll
 Suspended (during investigation)
 Fined
 Sued by shareholders (held liable) (if they are found to be negligent)
 Lose clients / fired by clients (because his integrity would be questioned )
6

TOTAL MARKS

70

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QUESTION 7
NOTES TO FINANCIAL STATEMENTS, CASH FLOW STATEMENT AND INTERPRETATION

7.1
7.1.1 Liquidity 
7.1.2 Gearing 
7.1.3 Net working capital 
7.1.4 Limited liability 
4

7.2 MIHKA LTD

7.2.1 ORDINARY SHARE CAPITAL

Authorised Share Capital

800 000 ordinary shares

Issued Share Capital

600 000 Ordinary shares on 1 January 2016 4 200 000
Issued on 31 August 2016 balancing figure
100 000 840 000 *
repurchase must be a subtraction from top
(40 000)  Re-purchased (ASP: R7,20) (288 000) 

660 000  Ordinary shares on 31 December 2016 4 752 000  6

Ignore brackets *Check balancing figure (ClosBal + BuyBack – OpBal) for method
mark
RETAINED INCOME

Balance on 1 January 2016 276 000

Net profit after income tax (1 150 000 – 322 000) 828 000 
Shares repurchased (40 000  x R1,30 ) must be in
(52 000) 
brackets
Ordinary share dividends balancing figure; must be in
(415 000) 
brackets
 Interim dividends total dividends – final
dividends 240 000 
or (65c – 25c) x 600 000
 Final dividends 175 000 

Balance on 31 December 2016 637 000  9

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7.2.2 CASH EFFECTS OF OPERATING ACTIVITIES 292 600 *

Cash generated from operations 1 237 400

Interest paid (100 000) 

Income tax paid (9 200  + 322 000  + 3 600 ) (334 800) *

Dividends paid (270 000  + 240 000 ) see 5.2.1 (510 000) * 9

*one part correct; lose method mark on answer if incorrect use of bracket

7.2.3 Amounts in the Cash Flow Statement:

Calculate: Change in fixed deposit

300 000  Inflow 

3
Calculate: Proceeds on disposal of equipment

5 828 000  + 360 400  – 1 495 000  – 4 905 800  = 212 400 
one part correct

OR:
– 5 828 000 – 360 400 + 1 495 000 + 4 905 800 = –212 400

Inflow  6

7.2.4 Calculate: Mark-up percentage on cost

1 890 000  x 100 = 45%  one part correct;

6 090 000  – 1 890 000  correct use of numerator & denominator
4 200 000 two marks
4
Calculate: Debt-equity ratio

1 000 000  : (4 752 000  + 637 000)

5 389 000 two marks
0,2 : 1 one part correct; must be x:1 accept 0,19:1
4
Calculate: Net asset value (in cents)
see above
5 389 000  x 100 = 817 or 816,5 cents  one part correct; accept 816
660 000  see 5.2.1 correct use of numerator & denominator
Do not accept Rand sign 3

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7.2.5 The financial director was questioned about the decision to increase the
loan. Explain what he should say to justify this decision. Quote TWO
financial indicators (with figures).

Financial indicators:   trend with figures  

Debt-equity ratio increased (from 0,1 : 1) to 0,2 : 1 / by 0,1 : 1 see 5.2.4

Return on average capital employed (ROTCE) increased from 21,3% to 21,8%.

Explanation

 Although the debt-equity ratio increased, the company is low risk / low
gearing. 
 The ROTCE has also increased – earning far above the interest rate of
12,5% (positive gearing). 
Do not accept increase in risk as an explanation (counts against the decision) 6

7.2.6 Ashraf, a new shareholder, bought 70 000 shares on 31 August 2016. He

expected the company to distribute at least 80% of its earnings as it did
in 2015.

Ashraf is unhappy with the dividend pay-out policy for 2016. Provide a
calculation to support his opinion.

65 /131  x 100 = 49,6%  accept 49,61% or 50% one part correct

Response for two marks:
DPS was 65c while EPS was 131c 3
Explain TWO points to support the company's decision regarding
dividends for 2016.

Explanation   One mark for incomplete / unclear answer

 The company decided to retain more of the EPS this year
 The NAV would increase thereby positively affecting the market price of the
shares
 The company retained funds to expand the company in future (extensions
to the building)
 Improve the cash situation/eliminated the bank overdraft from 2015
 Improvements could lead to greater profitability in the future
 The ROSHE has also increased – possibly better dividends in the long run.
 Shareholders would benefit from a capital gain on shares
 Cheaper than borrowing money (avoid interest)
4

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7.2.7 Comment on the re-purchase price paid for the 40 000 shares on
30 December 2016. Provide TWO financial indicators (with figures) in your
comment.
Two indicators with figures

 NAV is 817 cents see 5.2.4

 Market price is 848 cents

Comment  One mark for incomplete / unclear answer

 The shareholder has benefitted as he may have received less had he sold
his shares on the stock exchange.
 The directors may have to be investigated to determine why they
disadvantaged the company.
 The price is fair because in line with the current market price.
 The price was set at a level to encourage the disgruntled shareholder to sell
his shares.

Complete comment would include an opinion e.g. fair / unfair

4

TOTAL MARKS

65

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QUESTION 8: FIXED ASSETS, INCOME STATEMENT AND AUDIT REPORT

8.1
8.1.1 Equity  or shareholders’ equity

8.1.2 Current asset 

8.1.3 Non-current asset 
Accept recognisable
8.1.4 Expense  abbreviations (e.g. NCA) 4

8.2 YASHPAL LTD

8.2.1 Refer to Information A:
WORKINGS ANSWER
(i)
838 000 – 420 000 418 000 

(ii)
838 000 x 15% = 125 700  139 200 
216 000  x 15% x 5/12  = 13 500  one part correct one part correct

(iii)
26 250  – 4 250  22 000 
one part correct
OR: 105 000 – 83 000 (refer Asset disposal account below) 11

8.2.2
ASSET DISPOSAL (N12)
2018 2018 Accumulated Depreciation
Jan
1 Equipment 105 000 * Jan 1
on Equipment 
83 000 *
Profit on sale of
4 250  Bank 26 250 
asset
*Equipment
(622 000 – 517 000) 

109 250  109 250 

*balancing
 figure
- 1 (max -2) Presentation; incorrect or no details provided

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8.2.3 Income Statement for the year ended 28 February 2018

Sales 7 437 500 + 32 200 or COS x 175% 7 469 700 

Cost of sales 4 250 000  + 18 400  (4 268 400) *
7 Gross profit Sales – COS 3 201 300 
Other income operation 98 700 
Fee income 79 350
Discount received 14 280 
Profit on sale of asset 4 250 
Provision for bad debts adjustment (7 480 – 6 660) 820 *

6 Gross income GP + OI 3 300 000 

Operating expenses GI – OP (1 350 000) 
Depreciation (139 200  + 35 400 ) 174 600 *
3.2.1 (ii)
Trading stock deficit (728 400 – 18 400 – 706 350) 3 650 *
22 050 one mark (even with no workings shown)

Packing material (43 730 – 3 880) 39 850 *

Directors fees (336 500  + 23 500 ) 360 000 
Audit fees (19 450  + 19 450 ) 38 900 
Bad debts (23 555  + 11 245 ) 34 800 *
Rent expense (146 080  – 11 770 ) 134 310 *
Salaries and wages 222 700 
Sundry expenses balancing figure 341 190 

25 Operating profit PBIE – Int Inc 1 950 000 

Interest income 195 000 x 8% x ½ 7 800 *
Profit before interest expense 1 957 800
Interest expense 565 800 - 542 000 (23 800) 
Net profit before income tax 560 860 x 100/29 1 934 000 
Income tax (560 860) 
8 Net profit after tax 560 860 x 71/29 1 373 140 * 46
-1 for foreign items (max -2) *Operation, one part correct

© Gauteng Department of Education

 22

8.3 AUDIT REPORT: PICOLI LTD

8.3.1 Briefly explain the role of the external auditor.

Explanation  part marks for incomplete/unclear answers

 Express an unbiased opinion on the fair presentation of financial

statements.
 Protect the interest of shareholders by providing an independent,
unbiased opinion on the financial statements.
 Assessing the internal controls and financial statements and reporting
any discrepancies that do not conform to audit practices through the
type of report they offer.
2

8.3.2 What type of audit report did Picoli Ltd receive? Explain.
Mark TYPE and EXPLANATION separately
TYPE: Qualified audit report 

EXPLANATION: Explaining the exception to fair presentation 

 The auditors found that the advertising expenses could not be verified.
 No documentation exists for the advertising expenses.
 They found a problem which they could not explain.
3

8.3.3 Why would an existing shareholder be concerned about this report?

Provide TWO points.

Two valid points   part marks for incomplete/unclear answers

 Proper internal controls are not being observed by management.

 The reputation of the company may be affected (public image).
 Potential investors will not be interested in the company (share prices
will drop).
 Possibility of fraud. Need to investigate
4

Q8:
TOTAL MARKS 75

© Gauteng Department of Education