AUE1601
EXAM PACK
FOR ASSISTANCE WITH THIS MODULE +27 67 171 1739
,AUE1601 OCTOBER NOVEMBER 2025 EXAM MEMO
1. A pre-incorporation contract must be ratified by the company within what
period after incorporation (unless the MOI provides otherwise)?
a) Within 1 month
b) Within 2 months
c) Within 3 months
d) Within 6 months
Explanation: The Companies Act allows the company a limited period to adopt or
reject a pre-incorporation contract, commonly tested as three months.
2. Which document is regarded as the founding document of a company?
a) Articles of association
b) Memorandum of Incorporation (MOI)
c) Companies Regulations
d) Annual financial statements
Explanation: The MOI sets out the rights, duties and governance rules of the
company.
3. What is the minimum number of directors required for a private company
(Pty) Ltd if the MOI does not prescribe more?
a) 0
b) 1
c) 2
d) 3
Explanation: Private companies generally require at least one director.
,4. What is the minimum number of directors required for a public company if
the MOI does not prescribe more?
a) 1
b) 2
c) 3
d) 5
Explanation: Public companies require at least three directors.
5. Which item is NOT used when calculating the public interest score (PIS)?
a) Turnover in millions
b) Number of employees
c) Number of shareholders
d) Payroll expense in millions
Explanation: PIS uses turnover, third-party liabilities, employees, and beneficial
interest holders, not payroll cost.
6. A company must keep accounting records for which period?
a) Current year and 5 prior years
b) Current year and 7 prior years
c) Current year and 8 prior years
d) Current year and 10 prior years
Explanation: The retention period tested is typically seven years.
7. What is the quorum for a directors’ meeting if the company has nine
directors and the MOI is silent?
a) 4 directors
b) 5 directors
, c) 6 directors
d) 7 directors
Explanation: Quorum is a majority of directors entitled to vote.
8. What is the quorum for a directors’ meeting if the company has three
directors and the MOI is silent?
a) 1 director
b) 2 directors
c) 3 directors
d) All directors
Explanation: A majority of three is two.
9. True or False: A directors’ resolution passes if exactly 50 percent of
directors vote in favour and 50 percent vote against.
a) False
b) True
Explanation: A tie is not a majority; a casting vote may apply only in limited
circumstances.
10. Who may be included when determining quorum at a directors’ meeting?
a) Company secretary
b) Chief audit executive
c) External audit partner
d) Properly appointed directors
Explanation: Only directors count for quorum.
11. Which statement best describes the fundamental principle of objectivity for
an external auditor?
EXAM PACK
FOR ASSISTANCE WITH THIS MODULE +27 67 171 1739
,AUE1601 OCTOBER NOVEMBER 2025 EXAM MEMO
1. A pre-incorporation contract must be ratified by the company within what
period after incorporation (unless the MOI provides otherwise)?
a) Within 1 month
b) Within 2 months
c) Within 3 months
d) Within 6 months
Explanation: The Companies Act allows the company a limited period to adopt or
reject a pre-incorporation contract, commonly tested as three months.
2. Which document is regarded as the founding document of a company?
a) Articles of association
b) Memorandum of Incorporation (MOI)
c) Companies Regulations
d) Annual financial statements
Explanation: The MOI sets out the rights, duties and governance rules of the
company.
3. What is the minimum number of directors required for a private company
(Pty) Ltd if the MOI does not prescribe more?
a) 0
b) 1
c) 2
d) 3
Explanation: Private companies generally require at least one director.
,4. What is the minimum number of directors required for a public company if
the MOI does not prescribe more?
a) 1
b) 2
c) 3
d) 5
Explanation: Public companies require at least three directors.
5. Which item is NOT used when calculating the public interest score (PIS)?
a) Turnover in millions
b) Number of employees
c) Number of shareholders
d) Payroll expense in millions
Explanation: PIS uses turnover, third-party liabilities, employees, and beneficial
interest holders, not payroll cost.
6. A company must keep accounting records for which period?
a) Current year and 5 prior years
b) Current year and 7 prior years
c) Current year and 8 prior years
d) Current year and 10 prior years
Explanation: The retention period tested is typically seven years.
7. What is the quorum for a directors’ meeting if the company has nine
directors and the MOI is silent?
a) 4 directors
b) 5 directors
, c) 6 directors
d) 7 directors
Explanation: Quorum is a majority of directors entitled to vote.
8. What is the quorum for a directors’ meeting if the company has three
directors and the MOI is silent?
a) 1 director
b) 2 directors
c) 3 directors
d) All directors
Explanation: A majority of three is two.
9. True or False: A directors’ resolution passes if exactly 50 percent of
directors vote in favour and 50 percent vote against.
a) False
b) True
Explanation: A tie is not a majority; a casting vote may apply only in limited
circumstances.
10. Who may be included when determining quorum at a directors’ meeting?
a) Company secretary
b) Chief audit executive
c) External audit partner
d) Properly appointed directors
Explanation: Only directors count for quorum.
11. Which statement best describes the fundamental principle of objectivity for
an external auditor?
