Internal audit function The internal audit function consists of Peter Locker, the CAE, two internal audit managers, three senior internal auditors and six internal auditors. There is an internal audit charter in place. An extract from some of the sections (6,7 and 8) of the internal audit charter reads as follows: TL102_0_2024 6 6. Organisation The CAE shall report to the board administratively and functionally to the CEO. 7. Independence and Objectivity The chief audit executive will ensure that the internal audit activity remains free from all conditions that threaten the ability of internal auditors to carry out their responsibilities in an unbiased manner, including matters of audit selection, scope, procedures, frequency, timing, and report content. Internal auditors will have no direct operational responsibility or authority over any of the activities audited. The internal auditors should assist with specific operational responsibilities when requested. 8. Responsibility The Chief Audit Executive and the internal audit staff has the responsibility to: a) Submit annually to senior management and the board a risk-based internal audit plan for notification purposes. b) Ensuring that the internal audit function collectively possesses or obtains the knowledge, skills and other competencies needed to meet the requirements of the internal audit charter. c) Set the risk appetite for the organisation and review the management of key risks. d) Issue quarterly reports on the results of the audit activities to management and the board, after its approval by the CEO. Approval/Signature 15/06/2022 Chief Audit Executive Date Chief Executive Officer Date TL102_0_2024 7 REQUIRED Marks 1. 17/06/2022 Explain the instances of non-adherence to the recommended practices outlined in the King IV Report on Corporate Governance for South Africa 2016 relating to: a) the composition of the governing body/board and b) the composition and the sufficiency of the board committees (30) Provide your answer in the following format: No King IV requirement (1 mark each) Instance of non-adherence in Delta Development Ltd (1 mark each) 2 Review the internal audit charter above according to the Global Internal Audit Standards, identify and explain shortcomings and recommend improvements to the charter. (20) Provide your answer in the following format: No Identification and explanation of deficiency/shortcoming identified (1 mark each) Quote from Global Internal Audit Standards (1 mark each) Recommendation to the internal audit charter (e.g., indicate if a certain part should be taken out or if rewritten - rewrite how it should be) (1 mark each)