Aue Tut Letter
AUE1601/202/2/2012
Tutorial Letter 202/2/2012
Legal aspects in Accountancy
AUE1601
Semester 2
Department of Auditing
This tutorial letter contains the key and comments on assignment 02
Bar code
MOI = Memorandum of Incorporation, Companies Act = Companies Act 71 of 2008, as amended 1. KEY AND COMMENTS ON ASSIGNMENT 02/2012 61 marks
QUESTION 1 Specific comments
Question 1.1 Students should take note of the requirement, namely “Evaluate and conclude on the legality of the granting of the loan”, as marks were awarded for theory and the conclusion. According to the information a loan is granted to a subsidiary. Note that section 45(45(2) specifically provides that a company may make a loan to a related or inter-related company. Question 1.2 Students should take note of the requirement, namely “Evaluate and conclude” …. “in terms of the requirements of the Companies Act”. It should be noted that marks were awarded for theory, therefore stating the requirements as per the Companies Act. The given information in the question subsequently had to be evaluated against all the requirements of the Companies Act. A final conclusion had to be made if the situation complies with the requirements of the Companies Act, therefore concluding if the company was in contravention of the Companies Act or not. It is important to note that financial information was provided in the question. Section 22 of the Companies Act states that a company must not trade under insolvent circumstances. Students were therefore required to calculate if the Company was still liquid and solvent. Question 1.3 Students should take note of the requirement, namely “Evaluate and conclude”. It should be noted that marks were awarded for theory, therefore stating the requirements as per the Companies Act. The given information in the question subsequently had to be evaluated against all the requirements of the Companies Act. A final conclusion had to be made if the situation complied with the
Tutorial Letter 202/2/2012
Legal aspects in Accountancy
AUE1601
Semester 2
Department of Auditing
This tutorial letter contains the key and comments on assignment 02
Bar code
MOI = Memorandum of Incorporation, Companies Act = Companies Act 71 of 2008, as amended 1. KEY AND COMMENTS ON ASSIGNMENT 02/2012 61 marks
QUESTION 1 Specific comments
Question 1.1 Students should take note of the requirement, namely “Evaluate and conclude on the legality of the granting of the loan”, as marks were awarded for theory and the conclusion. According to the information a loan is granted to a subsidiary. Note that section 45(45(2) specifically provides that a company may make a loan to a related or inter-related company. Question 1.2 Students should take note of the requirement, namely “Evaluate and conclude” …. “in terms of the requirements of the Companies Act”. It should be noted that marks were awarded for theory, therefore stating the requirements as per the Companies Act. The given information in the question subsequently had to be evaluated against all the requirements of the Companies Act. A final conclusion had to be made if the situation complies with the requirements of the Companies Act, therefore concluding if the company was in contravention of the Companies Act or not. It is important to note that financial information was provided in the question. Section 22 of the Companies Act states that a company must not trade under insolvent circumstances. Students were therefore required to calculate if the Company was still liquid and solvent. Question 1.3 Students should take note of the requirement, namely “Evaluate and conclude”. It should be noted that marks were awarded for theory, therefore stating the requirements as per the Companies Act. The given information in the question subsequently had to be evaluated against all the requirements of the Companies Act. A final conclusion had to be made if the situation complied with the