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MBOMBELA LTD Refer to the extract below - NSC Accounting - Question 4 - 2023 - Paper 1
Question 4
MBOMBELA LTD Refer to the extract below. Shareholders of the company were unhappy with reports about the chief financial officer (CFO) and approached the board of ... show full transcript
Worked Solution & Example Answer:MBOMBELA LTD Refer to the extract below - NSC Accounting - Question 4 - 2023 - Paper 1
Step 1
Why was the poor control by the Board or Remunerations committee over Donald's appointment / were correct procedures not followed when deciding on his salary package / did they check references from previous employers regarding his qualifications & experience?
Answer
Shareholders may want to ask why the Board did not thoroughly vet Donald's qualifications and experience before offering him a significant salary package. The failure to do proper due diligence raises concerns about the hiring processes already in place and the authority of the Board or Remunerations committee.
Step 2
Why did the Board not match the competitor’s offer without verifying it properly?
Answer
The shareholders might question why the Board chose not to verify the legitimacy of the offer made by the competitor to Donald. Understanding why they did not confirm these details can provide insights into the Board's decision-making process and oversight.
Step 3
Given Donald’s dishonesty (over his qualifications and job offer), has the Board conducted further investigations into his conduct (e.g. embezzlement)?
Answer
Shareholders will likely seek to understand what actions the Board is taking in response to the whistle-blower's revelations about Donald's credentials. They may ask if further investigations were initiated to address concerns about his conduct and the potential impact on company operations.