Question 1

SECTION A - CASE 3: GLOBAL WATER INITIATIVE

SCENARIO:
Global Water Initiative (GWI) is an international NGO providing clean water solutions in developing nations. You are advising the board on corporate governance and internal audit. GWI currently does not have an internal audit department. The board consists of the CEO, the CFO, and two non-executive directors (NEDs), one of whom is the CEO's brother. GWI receives significant grant funding, which requires strict compliance with donor conditions. Recently, a whistleblower alleged that procurement contracts in a regional office were awarded to a company owned by the regional director.

QUESTION:
Based on best practice corporate governance principles, which TWO of the following represent deficiencies in GWI's current board structure?

Accepted Answer

Evaluate the board composition against standard corporate governance codes (e.g., independence of NEDs, balance of power).

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Assuming that NGOs do not need to follow corporate governance principles, or thinking the CFO shouldn't be on the board.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA AA — Audit and Assurance Practice Exam 1

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