From: Mmaphure Mudau To: Management Accountant Sent: 26 May 2023 Subject: Concerns raised in the Risk Committee Meeting Good day I have recently attended a meeting with the Audit and Risk Committee where numerous issues were discussed. I would like you to assist me in responding to the issues that were raised. The Audit and Risk committee is aware of discussions from a senior leadership team meeting regarding the unfair practices across South African plants where older workers have been fired and replaced with younger and cheaper employees. At this meeting, there was a discussion regarding MGSs response to the findings of a recent news article. The newspaper article reported that Matla Green Solutions fired older workers and replaced them with younger and cheaper employees. That is how they managed to remain competitive and charge lower costs as they are exploiting these younger employees while older employees lose their jobs. Ms Mudau stated that no response was needed, as most stakeholders are unaware of the issues, and the use of younger and cheaper employees is world-wide common practice. She further stated that it is impractical to rely on older employees, as they get sick all the time, cheap labour is the way to go in order to stay in the game. However, Mr Matla insisted that this poses a signainfaicant reputational risk which must be removed at all costs and that MGS must consider stopping the use of younger employees at cheaper remuneration. Mr Scott suggested that MGS should continue to use younger and cheaper employees and get rid of older employees, however they must control and monitor the situation and ensure that everything is done according to labour law standards in order to maintain ethical standards. Kindly prepare a response which addresses the following:

4.1. Identify and explain how each risk response suggested by the three directors would be categorized using an appropriate risk management framework (TARA)

4.2. Evaluate the appropriateness of the risk response of Ms Mudau and Mr Matla. 4.3. Recommend TWO control activities which should be implemented to assist in managing this risk, after considering suggestions made by Mr Scott.

We are also concerned with the scandalous news surrounding the accounting profession regarding the fraudulent activities that take place when it comes to financial reporting.We have a number of complex transactions that we need to be vigilant of. This needs more attention especially now since head of the technical accounting department has just resigned with immediate effect.

4.4. I would like you to prepare a report which identifies/highlights the fraud and/or errors that could occur during the consolidation process that would increase the risk of incorrect reporting of financial statements for the year ended 31 December 2022. In the report, please also advise how fraud risk management strategies can be addressed including the use of the COSO model.

Kind regards, Ms Mmaphure Maponya Chief Financial Officer (Acting) Matla Green Solutions