⋆ [Grad] ⋆
]]
AUE2602: Corporate Governance in Accountancy
May/June Examination 2026 — Past Paper Revision Guide
(Based on May/June 2025 & May/June 2024 Past Papers)
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
[Book] Auditing & Corporate Governance [Book]
[Book] Exam Revision Guide
AUE2602
Module Code:
Corporate Governance in Accountancy
Module Name:
May/June 2025 & May/June 2024
Papers Covered:
May/June 2026
Exam Year:
100 Marks
Approx. Total:
University of South Africa (UNISA)
Institution:
Understand the concepts — don’t just memorise. Every answer here is a study
note, not a template to copy.
[Grad] Exam Revision Notes | AUE2602 | 2026
,AUE2602 | Exam Revision Corporate Governance in Accountancy
Question 1 [25 marks]
Scenario: Protea Distributors Ltd
Protea Distributors Ltd (Protea) is a listed public company on the Johannesburg Stock Ex-
change (JSE). Its board consists of the following members:
• Mr S Kolisi – Chief Executive Officer (CEO), appointed 1 July 2009. He also serves on
the Audit Committee and the Remuneration Committee.
• Ms T Dlamini – Chairperson of the Board, appointed 1 March 2020. She also serves as
the Chairperson of the Nominations Committee.
• Mr P Nkosi – Chief Financial Officer (CFO), appointed 15 January 2018. He attends
Audit Committee meetings by invitation.
• Mr B Swart – Non-executive director. He chairs the Audit Committee and the Risk
Committee.
• Ms R Ndlovu – Independent non-executive director. She is also the company secretary.
• Mr A Patel – Executive director (Operations). He has served on the board since 2005.
Protea’s audit committee has three members and meets four times per year.
(a) [10 marks]
Question: Using the information provided, identify and discuss FIVE governance de-
ficiencies relating to the composition and committee membership of Protea’s board of
directors, with reference to the King IV Report on Corporate Governance.
Answer:
[!] Key Concept
King IV defines corporate governance as the exercise of ethical and effective lead-
ership by the governing body. Boards must be composed and structured in a way
that enables independent oversight and sound decision-making.
The following five governance deficiencies exist at Protea:
Deficiency 1 – CEO serving on the Audit Committee (2 marks)
Mr Kolisi, as CEO, is an executive director and may not serve on the Audit Commit-
Page 2 of 27 [Grad]
, AUE2602 | Exam Revision Corporate Governance in Accountancy
tee. King IV requires that the Audit Committee be composed entirely of independent
non-executive directors. An executive’s presence on this committee destroys the indepen-
dence needed to oversee management and the external auditors.
Deficiency 2 – CEO serving on the Remuneration Committee (2 marks)
King IV recommends that the Remuneration Committee consist of a majority of in-
dependent non-executive directors. The CEO, as an executive, has a direct financial
interest in remuneration decisions. His membership on this committee is a conflict of
interest and compromises the committee’s objectivity when determining executive pay.
Deficiency 3 – Mr Swart chairing both the Audit Committee and the Risk
Committee (2 marks)
While King IV does not explicitly prohibit a director from chairing more than one com-
mittee, best governance practice – and the spirit of King IV – warns against one indi-
vidual holding too much power or oversight responsibility. Chairing two major oversight
committees creates a concentration of power that could impair effective governance and
independent oversight.
Deficiency 4 – Ms Ndlovu acting as both an independent non-executive di-
rector and company secretary (2 marks)
The Companies Act and King IV are clear that the company secretary must be inde-
pendent of the board. A non-executive director serving as company secretary is not
independent – she owes duties as a director and cannot objectively advise the board on
governance and statutory compliance as required of a company secretary. These two
roles should be kept separate.
Deficiency 5 – Mr A Patel’s long service (2 marks)
Mr Patel has served since 2005, which means he has held his position for approximately
20 years. King IV recommends that the tenure of non-executive directors be carefully
managed to preserve independence. Prolonged service risks compromising a director’s
ability to exercise objective judgment, as relationships and familiarity with management
may develop over time.
Page 3 of 27 [Grad]
]]
AUE2602: Corporate Governance in Accountancy
May/June Examination 2026 — Past Paper Revision Guide
(Based on May/June 2025 & May/June 2024 Past Papers)
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
[Book] Auditing & Corporate Governance [Book]
[Book] Exam Revision Guide
AUE2602
Module Code:
Corporate Governance in Accountancy
Module Name:
May/June 2025 & May/June 2024
Papers Covered:
May/June 2026
Exam Year:
100 Marks
Approx. Total:
University of South Africa (UNISA)
Institution:
Understand the concepts — don’t just memorise. Every answer here is a study
note, not a template to copy.
[Grad] Exam Revision Notes | AUE2602 | 2026
,AUE2602 | Exam Revision Corporate Governance in Accountancy
Question 1 [25 marks]
Scenario: Protea Distributors Ltd
Protea Distributors Ltd (Protea) is a listed public company on the Johannesburg Stock Ex-
change (JSE). Its board consists of the following members:
• Mr S Kolisi – Chief Executive Officer (CEO), appointed 1 July 2009. He also serves on
the Audit Committee and the Remuneration Committee.
• Ms T Dlamini – Chairperson of the Board, appointed 1 March 2020. She also serves as
the Chairperson of the Nominations Committee.
• Mr P Nkosi – Chief Financial Officer (CFO), appointed 15 January 2018. He attends
Audit Committee meetings by invitation.
• Mr B Swart – Non-executive director. He chairs the Audit Committee and the Risk
Committee.
• Ms R Ndlovu – Independent non-executive director. She is also the company secretary.
• Mr A Patel – Executive director (Operations). He has served on the board since 2005.
Protea’s audit committee has three members and meets four times per year.
(a) [10 marks]
Question: Using the information provided, identify and discuss FIVE governance de-
ficiencies relating to the composition and committee membership of Protea’s board of
directors, with reference to the King IV Report on Corporate Governance.
Answer:
[!] Key Concept
King IV defines corporate governance as the exercise of ethical and effective lead-
ership by the governing body. Boards must be composed and structured in a way
that enables independent oversight and sound decision-making.
The following five governance deficiencies exist at Protea:
Deficiency 1 – CEO serving on the Audit Committee (2 marks)
Mr Kolisi, as CEO, is an executive director and may not serve on the Audit Commit-
Page 2 of 27 [Grad]
, AUE2602 | Exam Revision Corporate Governance in Accountancy
tee. King IV requires that the Audit Committee be composed entirely of independent
non-executive directors. An executive’s presence on this committee destroys the indepen-
dence needed to oversee management and the external auditors.
Deficiency 2 – CEO serving on the Remuneration Committee (2 marks)
King IV recommends that the Remuneration Committee consist of a majority of in-
dependent non-executive directors. The CEO, as an executive, has a direct financial
interest in remuneration decisions. His membership on this committee is a conflict of
interest and compromises the committee’s objectivity when determining executive pay.
Deficiency 3 – Mr Swart chairing both the Audit Committee and the Risk
Committee (2 marks)
While King IV does not explicitly prohibit a director from chairing more than one com-
mittee, best governance practice – and the spirit of King IV – warns against one indi-
vidual holding too much power or oversight responsibility. Chairing two major oversight
committees creates a concentration of power that could impair effective governance and
independent oversight.
Deficiency 4 – Ms Ndlovu acting as both an independent non-executive di-
rector and company secretary (2 marks)
The Companies Act and King IV are clear that the company secretary must be inde-
pendent of the board. A non-executive director serving as company secretary is not
independent – she owes duties as a director and cannot objectively advise the board on
governance and statutory compliance as required of a company secretary. These two
roles should be kept separate.
Deficiency 5 – Mr A Patel’s long service (2 marks)
Mr Patel has served since 2005, which means he has held his position for approximately
20 years. King IV recommends that the tenure of non-executive directors be carefully
managed to preserve independence. Prolonged service risks compromising a director’s
ability to exercise objective judgment, as relationships and familiarity with management
may develop over time.
Page 3 of 27 [Grad]
