S94 Audit committee

Question 1

Regarding the appointments of auditors

Answer 1

public companies are required to appoint
audit committees consisting only of independent non-executive directors (section
94(4) of the Companies Act). (1)

2.1 In terms of section 94(7) of the Companies Act, this audit committee is
responsible for nominating for appointment as the company’s auditor a
registered auditor who is considered to be independent from the company. (1)

2.2 Therefore, the role of management in the appointment of a public company’s
external auditors has diminished significantly. (1)

2.3 Before investing in a company, the investor should also consider the disclosed
corporate governance practices, and avoid investing in companies with poor
practices