Description
CAS3701 | ASSESSMENT 8
This is an individual assessment!
ASSESSMENT 8: STUDENT QUESTION AND ANSWER BOOK
OCTOBER / NOVEMBER 2026
Due Date: 30 October 2026
Total: 100 Marks
TECHNICAL EVIDENCE
CRITICAL JUDGEMENT
PROFESSIONAL ACTION
Examiners (first)
Ms M Mhatlhe, Dr. Yaeesh Yasseen
Examiners (second) Mrs M Evans
External Examiner
Prof. J Christian
STUDENT NUMBER:
This assessment consists of 33 pages.
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CAS3701 | ASSESSMENT 8
SUMMATIVE ASSESSMENT INSTRUCTIONS:
This is an individual, take-home summative assessment for CAS3701 module.
Answer directly in the spaces provided in the answer book below. The response areas will expand while you
type. Your responses must be typed and they must adhere to the following formatting requirements:
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Convert the completed document to a single PDF before submission and check that all pages are
readable.
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Students are advised to preview submissions to ensure that the correct file has been uploaded. Marks
awarded for incorrect submissions will be the student’s final mark. No opportunity for resubmission will
be granted.
Incorrect file format and uncollated files will not be considered.
Submissions will only be accepted from registered student accounts.
NO emailed submissions will be accepted.
UNISA has a zero-tolerance policy for plagiarism and any other forms of academic dishonesty.
Students suspected of academic misconduct will be subjected to disciplinary processes. Please refer to
the university’s policies on Plagiarism, Academic Integrity, and Copyright Infringement.
The module uses Turnitin as a proctoring tool. For instructions on how to use ‘Turnitin’ refer to the
‘Miscellaneous’ folder on the module site. The folder can be found under ‘Additional Resources’ on
Moodle.
If you use generative AI, search engines, grammar software or another digital tool, disclose that use and
retain the relevant prompt, output, source and verification trail. Refer to the 2026 UNISA Artificial
Intelligence Policy Guidelines for further guidance. Failure to disclose all AI usage will constitute
plagiarism.
Complete the AI-use and source declaration at the end of Part C.
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CAS3701 | ASSESSMENT 8
You may consult prescribed standards and legitimate sources. Cite the source or paragraph that
materially informed the judgement. Do not reproduce long definitions. Reference all sources used using
the CAS referencing guide found under ‘Additional Resources’.
All answers must be your original work.
Marks are awarded for case-based judgement and application, not long generic answers.
The answer book provided in Part C must be used to complete this examination.
Include the rubric at the end of the assessment. Do not complete or alter the rubric.
Use the following naming convention for your assessment script:
Student number_ CAS3701_2026_Assessment 8
How to approach this open-book assessment:
1. Read Part B first, so that you know what each question asks. Then read the case in Part A with the questions
in mind.
2. Use the question-to-dossier map in Part B to find the sections each question draws on.
AUTHOR PRACTICE AND RESPONSIBLE USE OF ARTIFICIAL INTELLIGENCE
AUTHORSHIP AND RESPONSIBILITY
The conceptual architecture, critical accounting position, pedagogic design, assessment requirements
and final academic decisions are the intellectual work of the authors. Editorial software did not
determine the curriculum, select evidence for students or replace academic responsibility. The author
adopts the view of using artificial intelligence responsibly. The authors maintain a clear philosophical
stance: artificial intelligence is fundamentally a tool that enables the human mind to rapidly design
and direct processes that would otherwise take our physical senses and bodies much longer to
execute. Because the human mind is the ultimate architect of this technology, it is logically impossible
to equate the creation with its creator. Therefore, our robust view is that humanity must strictly
maintain its sovereign status as the creator when interacting with artificial intelligence.
OPENAI CODEX IN CHATGPT WORK
GRAMMARLY
Used in a bounded editorial capacity for syntax
review, visual construction, document formatting
and consistency checking. The system was not
delegated academic judgement responsibility. The
authors do recognise that the power tools of AI
have helped them to work much more efficiently
and faster.
Used
for
language review and editorial
refinement. Suggested changes
remained
subject to the authors’ disciplinary judgement
and final approval.
The authors reviewed, revised and authorised the complete document and accept responsibility for
its final form.
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CAS3701 | ASSESSMENT 8
TABLE OF CONTENTS
Section
Contents
Part A
Case study scenario
Part B
Required and assessment questions
Part C
Answer book
Part D
Case-fact embedded Rubric
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CAS3701 | ASSESSMENT 8
PART A: CASE STUDY
Student’s Role
You are a member of the Board Finance, Risk and Social Accountability Committee for Kalahari Alloy and
Chrome Limited.
The full board has asked your committee to review management’s emergency production recovery proposal
before the company approves or regularises the involvement of Marula Route Services.
Read the detailed information below on the company.
Company Background and Strategy
Kalahari Alloy and Chrome Limited (“KAC”) is a South African mining and mineral processing company
operating near Steelpoort and Burgersfort. KAC mines chrome ore and produces processed chrome
concentrate for local and export markets. The company’s operations include the following:
one open-cast chrome mine
one processing plant with two furnaces
one mobile crushing yard
one shared rail siding
diesel-intensive contractor transport operations
haulage routes through Ga-Moraba village and nearby villages
export logistics through the Maputo and Durban corridors
KAC was not one of the great mining houses whose names moved markets in London before breakfast. It
was smaller, harder and more exposed. It operated near the Steelpoort and Burgersfort chrome belt. It sold
processed chrome concentrate into local and export markets. It lived inside the narrow corridor between
commodity price, furnace instability, logistics failure, contractor reliability, lender patience and community
tolerance.
KAC’s 2026 strategy is called KAC 2030: Responsible Minerals, Reliable Supply.
Strategic pillar
Management description
Current pressure point
Restore production reliability
Stabilise furnace availability and plant
throughput.
Furnace 2 availability has fallen to
68%.
Protect financial resilience
Preserve cash, lender confidence
and covenant headroom*.
Covenant headroom* is only R31
million.
Improve operational discipline
Reduce downtime, improve logistics
and clear inventory.
Inventory days have increased to 79.
Strengthen responsible sourcing Use approved suppliers with verified
documents.
Emergency supplier work started
before complete approval.
Maintain licence to operate
Protect safety, community trust and
road users.
A school-road incident was narrowly
avoided.
* Covenant headroom refers to the margin of safety or buffer between KAC’s actual financial performance and the strict
limits (covenants) set by its lenders in a loan agreement. It measures how far KAC is from breaching a condition in its
loan agreements and causing a technical default on its liabilities.
KAC creates value by supplying chrome ore, a critical mineral, to industrial markets while maintaining
disciplined operations and responsible stakeholder relationships. Chrome ore is globally used as a
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CAS3701 | ASSESSMENT 8
strategic resource in producing stainless steel, high corrosion resistance, and in defence and aerospace
applications.
The Red Dust Decision
The dust before sunrise
The red dust reached everything.
It lay on the weighbridge window in a thin, stubborn film. It settled in the grooves of the security boom. It
clung to the boots of the artisans leaving Furnace 2 after the night shift, men who could hear a furnace
misbehaving before the dashboard had time to translate heat into numbers. It turned the white contractor
bakkies a tired brown before sunrise. It drifted across the gravel road towards Ga-Moraba village, where
children in grey jerseys crossed the haul road before the first taxis began to shout their way through the
morning.
By 05:40 AM on Monday,9 March 2026, the dust had reached the board.
The board pack file was emailed by the Risk Management unit and it arrived without a covering message.
Only an attachment:
KAC_Production_Recovery_Regularisation_v4_clean.pdf
Naledi Maseko, the Company Secretary, noticed the word before she opened the board pack file.
Regularisation.
In accounting, the word sounded tidy. In a boardroom, it usually meant something had already happened.
She opened the file.
The first page was a photograph of Furnace 2 at sunrise. Orange light on steel. Blue-grey smoke lifting into
a cold winter sky. A line of ore trucks waiting neatly in the yard. The photograph made heat look productive
and danger look managed.
The second page was less polite.
Revenue at risk: R86 million.
Export penalty exposure: R14.7 million.
Covenant headroom: R31 million.
Furnace 2 availability: 68%.
Inventory days: 79.
Emergency supplier: already mobilised for two trial loads.
Weighbridge: offline for 11 hours.
Manual slips: used for two loads.
Diesel route logs: incomplete.
Supplier insurance: missing.
Driver induction: 22 of 51 drivers completed.
Community complaint: school-road incident narrowly avoided.
AI executive summary: recommends approval.
Internal Audit status: not evidence-ready for unrestricted approval.
Naledi sat back.
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CAS3701 | ASSESSMENT 8
The plant had not lied. Numbers seldom do. But someone had arranged them so that the answer seemed to
arrive before the question.
The Committee meeting above the plant
The Board’s Finance, Risk and Social Accountability Committee met that Monday at 08:00 in the small
boardroom above the plant administration block. You also attended as a member of the committee. The
boardroom had glass walls, a silent coffee machine and a view across the ore stockpiles towards the road
that ran past Ga-Moraba village.
The chairperson, Advocate Thandiwe Mbeki, placed the printed board pack file in front of her. She read with
a pen in hand. She had the habit of circling verbs.
“Approve.”
“Regularise.”
“Protect.”
“Manageable.”
“Ongoing.”
Then she looked up.
“Before we discuss approval,” she said, “I want to know what has already happened.”
The Chief Financial Officer (CFO), Pieter Kruger, did not flinch. He had spent the weekend with lenders,
logistics contractors and an export customer who had stopped using polite language. His revised forecast
had narrowed until it resembled a corridor with locked doors.
The Operations Director, Willem Botha, looked as if he had slept in his work shirt. Furnace 2 had been
unstable for six weeks. The plant was producing unevenly. Inventory was building up in the wrong place.
The rail siding was congested. The October export window was closing.
The Procurement Manager, Rakesh Naidoo, kept his hands folded on the table. Marula Route Services
(Marula), he said, was real, available and known in the district. It had trucks. It had mobile crushing capacity.
It had done similar work at Ga-Malekana village in 2025.
The Tax Manager, Amina Patel, had brought a folder marked VAT / Diesel / Supplier Support. It was thinner
than she wanted. She did not like files that depended on explanations rather than documents.
The Internal Audit Manager, Farah Cassim, had brought an exception note and no apology. Her function
was not to stop production. Her function was to say when a sentence had run ahead of evidence.
The Community Relations Manager, Sello Matlala, had not opened his laptop. He had a printed complaint
from the Ga-Moraba School Governing Body. He placed it face down on the table as if it were a photograph.
Naledi did not have a vote.
Still, her initials were on the board pack file.
Prepared by: N. Maseko
That was how responsibility entered quietly.
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CAS3701 | ASSESSMENT 8
ANNEXURES – Documents discussed at the Committee meeting
1.1 CFO memorandum
During the committee meeting, the CFO, submitted the following memorandum in support of supplier
regularisation of Marula as a service provider for KAC. Supplier regularisation is a process whereby an
existing supplier relationship that is non-compliant is retrospectively approved so that the supplier is now
formally aligned with KAC’s procurement and finance policies. Marula had already done trial work for KAC in
the prior 2025 financial year and was appointed outside of KAC’s normal procurement processes. See
extract below of the memorandum:
From: Pieter Kruger, Chief Financial Officer
To: Board Finance, Risk and Social Accountability Committee
Subject: Emergency production recovery and supplier regularisation
Dear Chairperson
The plant cannot absorb another month of reduced throughput. The revised forecast shows that if we delay
mobilisation by 21 days, we risk missing the October export window and triggering customer penalties
estimated at R14.7 million.
Lenders have not called a breach, but they have requested weekly liquidity updates. Our covenant
headroom is now narrow. If we do not recover throughput before month-end, the liquidity forecast becomes
materially weaker.
Marula has available mobile crushing capacity and haulage trucks. The supplier completed similar work at
the neighbouring Ga-Malekana operation in 2025. Procurement has obtained its CIPC registration, tax
compliance status, VAT registration and BBBEE certificate.
I accept that the file is not perfect. However, a perfect file in three weeks’ time will not move ore today.
I recommend board approval of a three-month emergency appointment, with outstanding documents
completed during mobilisation.
This is not a governance shortcut. It is a commercial response to an operational emergency.
Internal Audit note in margin: A commercial emergency can explain urgency. It cannot create evidence.
1.2 Financial and operating performance and forecast report
The CFO tabled and presented the following dashboard before the committee. Pieter Kruger explained that
the revised forecast assumes Marula is regularised within seven days and full mobilisation begins within ten
days. A delay of 21 days may reduce revenue by a further R34 million and may require lender waiver
discussions.
Indicator
2025 actual
2026 forecast BEFORE
regularisation
2026 revised forecast
AFTER regularisation
Revenue
R2 180 million
R2 340 million
R2 254 million
Revenue at risk if no
recovery
N/A
N/A
R86 million
Gross profit margin
26.8%
27.2%
22.9%
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CAS3701 | ASSESSMENT 8
Indicator
2025 actual
2026 forecast BEFORE
regularisation
2026 revised forecast
AFTER regularisation
EBITDA
R436 million
R468 million
R352 million
Finance costs
R81 million
R92 million
R108 million
Profit before tax
R188 million
R204 million
R76 million
Net debt
R940 million
R1 080 million
R1 210 million
Covenant headroom
R118 million
R74 million
R31 million
Average debtor days
46 days
53 days
66 days
Inventory days
44 days
57 days
79 days
Furnace 2 availability
82%
78%
68%
Lost production days
7 days
11 days
26 days
Export penalty exposure N/A
N/A
R14.7 million
Chair’s handwritten note: The forecast assumes regularisation is possible. What evidence makes it possible?
1.3 Financial option evaluation schedule
The Finance division prepared the following schedule, which demonstrates the financial effect of each
supplier regularisation option.
Assume all amounts below are before VAT unless stated otherwise.
Revenue
Indicative net
Option
Description
3-month estimated
operating/recovery
cost
protected /
Additional
financial
consequence
recovered over
3 months
financial effect
before wider
risk judgement
Option A: Stop
Marula and run
internal recovery
Stop Marula trial
work and use
internal teams,
overtime and
delayed
maintenance.
R20.4 million
R30.0 million
Possible
maintenance
deferral risk not
yet quantified.
R9.6 million
positive
Option B: Fully
approve Marula
for three months
Regularise
Marula for three
months and
allow full
mobilisation.
R40.8 million
R63.0 million Road controls
not included in
first forecast.
R22.2 million
positive before
evidence risks
Option C: Run
accelerated 21day
tender
Stop full
mobilisation of
Marula and run a
R3.2 million
tender/admin cost
Long-term
procurement
integrity
Possible R51.9
million adverse
effect including
Negative in short
term, but cleaner
procurement
shortened tender
among approved
suppliers.
protected, but
21-day delay
may reduce
revenue by
R34.0 million and
expose KAC to
R14.7 million
tender/admin
cost, delay loss
and penalty
exposure.
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CAS3701 | ASSESSMENT 8
Revenue
Indicative net
Option
Description
3-month estimated
operating/recovery
cost
protected /
Additional
financial
consequence
recovered over
3 months
financial effect
before wider
risk judgement
penalties.
Option D:
Conditional
bridge approval
Approve Marula
for 45 days only,
limited to capped
work, subject to
evidence gates*,
road controls and
parallel tender.
R22.2 million for 45day
bridge,
including shortcontract
premium
R27.0 million to
R31.5 million
Immediate road
controls for the
first month,
estimated at
R0.665 million,
with recurring
controls of
approximately
R0.305 million
per month
thereafter.
Approximately
R4.8m-R9.3m
positive before
road controls, or
about R4.1mR8.6m
after road
controls for the
first month.
*Evidence gate: a condition that must be met and evidenced before the next step may proceed.
Finance note: Option B appears strongest on short-term net recovery before evidence risk. Option D is financially
less attractive on the face of it, but it limits the risk of unrestricted approval while allowing partial production
recovery.
Naledi’s working note: The option with the highest financial recovery is not automatically the option the board can
defend. The option with the cleanest process may not protect production quickly enough. The recommendation must
carry both facts.
1.4 Tax, VAT, diesel and payment schedule
Amina Patel, the Tax Manager, prepared the following note for the committee. She reminded the committee
that tax consequences are not only about whether a deduction or VAT input may exist. They are also about
whether the company has the evidence to support the tax position.
KAC is a registered VAT vendor; its sales of chrome concentrate are taxable supplies. KAC is registered for
diesel refunds on its own qualifying mining activities and supplies diesel to contractors, including Marula, from its
own bulk tanks. Diesel issued to contractors is recorded against route logs.
You are not required to calculate a diesel rebate or VAT amount. Focus on the evidence needed to
support VAT, diesel and payment positions.
Issue
Current fact pattern
Tax / VAT / payment
implication
Evidence required before
claim or payment
VAT input on Marula
invoices
Marula’s VAT registration is
attached, but bank
verification and contract
approval are incomplete.
KAC may claim input VAT
only if it holds a valid tax
invoice and the service is
acquired for taxable
Valid tax invoice, verified
VAT vendor status, verified
bank details, approved
contract or bridge
supplies. Weak supplier
verification and incomplete
support may create and
audit-trail risk.
agreement, evidence of
services received.
Diesel rebate support Marula may perform mixed
activities: hauling, crushing
Qualifying and nonqualifying
diesel use must
Signed diesel logs, route
sheets, activity split,
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CAS3701 | ASSESSMENT 8
Issue
Current fact pattern
Tax / VAT / payment
implication
Evidence required before
claim or payment
support and road transport.
Diesel route logs are
incomplete.
be separated. Unsupported
claims may be disallowed
and may attract penalties
and interest.
supervisor sign-off and Tax
Manager review before
claims.
Supplier payment
support
Manual weighbridge slips
were used for two trial
loads when the
weighbridge was offline.
Payment based on weak
tonnage support may lead
to overpayment, disputes,
audit findings and weak
VAT support.
Weighbridge
reconciliation*, manual slip
review, delivery
confirmation, payment
approval trail and exception
sign-off.
Bank verification
Bank confirmation has not
yet been independently
verified.
Payment before verification
creates fraud and
misdirection-of-payment
risk. It may also weaken the
payment audit trail.
Independent bank
verification by Finance
before any material
payment.
Pricing and contract
terms
Procurement says pricing is
market-related, but no
benchmark is attached. Full
contract is not finalised.
If pricing is excessive or
terms unclear, payments
may be processed before
the board can defend the
commercial basis of the
expense.
Pricing benchmark, signed
bridge contract, scope,
rates, liability terms and
termination rights.
*Weighbridge reconciliation means matching recorded tonnage to delivery and payment records
Tax Manager’s handwritten note: Emergency work can be approved quickly. Tax evidence cannot be invented
later.
1.5 Financing and liquidity note
KAC’s current loan facility agreement contains a net-debt-to-EBITDA covenant and requires monthly
liquidity reporting when covenant headroom falls below R50 million. Headroom is now R31 million.
Management has identified three ways to fund the emergency recovery costs and related road-safety
controls.
You are not required to calculate detailed interest costs. Focus on liquidity, covenant sensitivity and
whether the funding route distorts the board’s supplier approval decision.
Funding option
Description
Approximate financial
effect
Professional judgement
issue
Option 1: Draw down
existing revolving credit
facility
Use available bank facility
to fund emergency
recovery and road controls.
Interest at 10.25% per
annum.
Fastest cash access;
increases net debt and
reduces covenant
headroom.
Supports urgency but may
worsen lender sensitivity if
evidence gaps remain
unresolved.
Option 2: Supplier credit
from Marula
Marula offers 45-day
payment terms if full threemonth
approval is granted.
A 2.5% premium applies to
deferred amounts.
Preserves short-term cash
but increases total supplier
cost and may pressure the
board into broader
approval.
Financing terms may
influence governance
judgement and create
expectation of longer
award.
Option 3: Use cash buffer Use internal cash
Avoids additional debt but May solve one emergency
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CAS3701 | ASSESSMENT 8
Funding option
Description
Approximate financial
effect
Professional judgement
issue
earmarked for furnace
maintenance and rail siding
repairs.
reduces operational
resilience.
by weakening another
control area.
CFO comment: Supplier credit reduces immediate cash pressure.
Internal Audit comment: Supplier credit should not be allowed to purchase board comfort. A payment term is not
neutral when it rewards the board for approving more than the evidence supports.
1.6 Marula supplier file
File item
Status
Comment
CIPC registration
Provided Registration appears valid.
Tax compliance status
Provided
Valid on date obtained.
VAT registration
Provided
VAT certificate provided in the file.
Bank verification
Incomplete Bank confirmation not yet independently verified by Finance.
BBBEE certificate
Provided
Level 2 certificate provided in the file.
Prior work reference
Provided Ga-Malekana operation confirms similar work in 2025 with no
major reported safety findings.
Insurance letter
Missing
Broker letter requested but not yet received.
Driver training records
Incomplete 22 of 51 drivers have completed KAC induction.
Conflict declaration
Incomplete One Marula director shares a surname with a KAC
procurement supervisor. Relationship not confirmed.
Pricing benchmark
Incomplete Procurement states the price is market-related, but no written
benchmark is attached.
Contract approval
Not finalised Letter of intent* signed by Operations for trial loads. Full
contract still with Legal.
Trial loads
Completed Two trial loads completed before board approval.
Weighbridge support
Exception Weighbridge offline for 11 hours. Manual slips used for two
loads.
*Letter of intent is a document showing intention to contract; it is not a full, approved contract.
The supplier file answers the simplest question first: Marula exists. It does not answer the harder board
question: whether Marula can be mobilised safely, fairly, lawfully and with an audit trail strong enough to
support payment, VAT, diesel claims and later scrutiny.
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CAS3701 | ASSESSMENT 8
1.7 Internal Audit exception note
Internal Audit performed a rapid review of the Marula emergency process. Internal Audit’s note is included
as a source of evidence. You are not required to perform audit procedures or prepare an audit report.
Finding
Evidence
Risk rating
Internal Audit view
Work began before full
board approval
Two trial loads completed
under letter of intent.
High
Board is being asked to regularise an
action already partly taken.
Supplier onboarding
incomplete
Missing insurance, incomplete
driver induction, unresolved
conflict declaration.
High
Supplier should not operate unrestricted
until minimum evidence gates are met.
Manual weighbridge slips
used
Weighbridge offline for 11
hours during two trial loads.
High
Payment, VAT and tonnage evidence
may be weak.
Diesel documentation
incomplete
Contractor route logs not
consistently signed.
Medium/High Diesel rebate and cost allocation
support may be challenged.
Road-safety control
Near miss reported at Ga-
High
Increased haulage without road controls
absent
Moraba school road.
may transfer risk to community.
Pricing support weak
No independent pricing
benchmark.
Medium
Board cannot conclude the rate is fair or
reasonable.
Internal Audit comment: The proposal may be commercially understandable. It is not yet evidence-ready for
unrestricted approval.
Internal Audit is not being asked to stop the plant. It is asking the board not to mistake commercial need for
evidence. That distinction is uncomfortable, but it is the distinction on which professional judgement often
turns.
1.8 Community road-safety complaint
Extract from complaint submitted by the Ga-Moraba School Governing Body and community road
committee:
On Thursday morning a Marula truck passed the school bend while learners were crossing. The driver
braked hard and the children ran back. Nobody was injured, but this was not because the road is safe. It
was because the children moved quickly.
The mine speaks of responsible minerals. We ask who carries responsibility when trucks move before the
road is ready.
Community concerns raised:
trucks pass the school entrance between 06:00 and 07:30
dust suppression is inconsistent
the gravel shoulder has deteriorated
there is no temporary traffic marshal
speed signage is faded
complaints are acknowledged but not closed
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CAS3701 | ASSESSMENT 8
Suggested controls and costing to address community concerns:
Control
Estimated cost
Two traffic marshals during school crossing hours R88 000 per month
Temporary speed signage and reflective markers
R360 000 once-off
Dust suppression on school route
R165 000 per month
Daily haulage curfew between 06:15 and 07:15
Operational scheduling cost
Community transport liaison officer for three months R52 000 per month
The CFO had included the road-safety costs below the line in the first forecast. Naledi noticed this.
Naledi’s handwritten comment: If the emergency contract increases truck movement, the road-safety plan cannot
remain a future promise.
Costs that protect children are not “below the line” to the people standing at the road.
1.9 Missing evidence schedule
Evidence item
Current status
Why it matters
Signed full contract
Missing
Board cannot confirm final legal terms, scope,
liability and exit rights.
Insurance confirmation
Missing
Safety and liability exposure remains unclear.
Driver induction records
Incomplete
Uninducted drivers increase safety and compliance
risk.
Conflict declaration
Incomplete
Procurement integrity cannot be concluded.
Bank verification
Incomplete
Payment control and fraud risk remain open.
Pricing benchmark
Missing
Board cannot conclude that the rate is fair.
Weighbridge reconciliation*
Missing for trial loads Payment, VAT and tonnage support are weak.
Diesel route logs
Incomplete
Diesel rebate and cost allocation support are weak.
Road-safety plan
Not approved
Community
risk
remains unfunded and
uncontrolled.
1.10 AI-generated executive summary
The CFO’s office used an internal AI drafting tool to prepare the following executive summary for the board
pack:
Management recommends approval of the Marula emergency recovery proposal. The proposed decision
restores production, protects liquidity and maintains stakeholder confidence. Supplier risk is manageable
because Marula has valid company registration, tax compliance, VAT registration, BBBEE credentials and
prior experience. Community engagement is ongoing, and operational recovery will improve the
company’s ability to fund further stakeholder commitments. The proposal is a commercially responsible
response to short-term disruption and should be approved.
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CAS3701 | ASSESSMENT 8
CFO note: This wording is a drafting aid only. The committee must satisfy itself that the summary is complete and
supported.
Chair’s handwritten note: Smooth wording is not evidence.
Naledi read the AI summary again. It was not wrong in the obvious way. That was the problem. It was
almost right. It captured the CFO’s preferred story and sanded down the jagged edges: trial loads before
approval, missing insurance, uninducted drivers, manual slips, unsigned diesel logs, a school-road
complaint and supplier credit that might quietly buy approval.
The danger was not that the AI had invented a fact. The danger was that it had arranged the facts into
comfort.
The Committee Meeting Closure
At 09:10 AM, the boardroom settled into the silence that comes when everyone knows the decision is not
clean.
Finance spoke of covenant headroom.
Operations spoke of furnace heat, export windows and tired crews.
Procurement spoke of a supplier that existed and could move.
Tax spoke of logs, slips and SARS.
Internal Audit spoke of evidence that had not yet arrived.
Community Relations spoke of a child stepping back from a truck.
The Chair closed the file.
“We are not deciding whether production matters,” she said. “It does. We are deciding whether urgency is
enough to regularise the way this decision has begun.”
She turned to Naledi.
“Prepare the committee recommendation. Not a perfect answer. A defensible one.”
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CAS3701 | ASSESSMENT 8
PART B: REQUIRED
As a member of the Board Finance, Risk and Social Accountability Committee of KAC, you have been
asked to review management’s emergency production recovery proposal before the Board approves or
regularises the involvement of Marula.
Your task is not to write a general essay on risk management. Your task is to read the board dossier, test
the evidence, interpret the financial and tax consequences, evaluate the financing choices, and advise
whether the board should approve, reject, defer, amend or conditionally approve management’s proposal.
Refer to the questions below and answer them individually.
Question-to-dossier map
Question
Focus
Marks
Q1
Real problem and board regularisation
decision
The Red Dust Decision, 1.1 to 1.2, 1.6
to 1.7, 1.9 and The Committee
12
Meeting Closure
Q2
Financial option evaluation
1.3, read with 1.6 to 1.9
15
Q3
Tax, VAT, diesel and payment
consequences
1.4, 1.6, 1.7 and 1.9
15
Q4
Financing and liquidity judgement
1.5, read with 1.2
12
Q5
Evidence sufficiency and risk transfer 1.6 to 1.9
16
Q6
AI summary, stakeholder voice and
responsible judgement
1.8 and 1.10, read with 1.6 to 1.9
10
Q7
Final board decision minute
The whole dossier, and your answers
to Q1 to Q6
10
Communication Structure, clarity and professional
integration
The Red Dust Decision, 1.1 to 1.2,
1.6, 1.7 and 1.9
10
Total
100
Question 1: Real problem and board regularisation decision
12 marks
Pieter Kruger presents the matter as an urgent production recovery problem. Advocate Mbeki’s concern is
different: the file does not ask for a clean future approval; it asks for regularisation.
Identify and explain the real problem before the board and recommend whether the board should approve,
reject, defer, amend or conditionally approve the regularisation of Marula’s involvement. In your solution
address the following:
What management says the problem is
what has already happened and the real board problem
why the commercial urgency is real
why the evidence/control weaknesses matter
two urgent corrections before wider mobilisation
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CAS3701 | ASSESSMENT 8
Recommended board stance
Question 2: Financial option evaluation
15 marks
The financial schedule has already been prepared for the board (refer to 1.3).
Using Options A-D and taking into account all the information in the case study, evaluate each option and
decide on which option is financially attractive, which option carries the greatest evidence/control weakness,
and which option the board can professionally defend.
In selecting your final option, consider the following:
what the figures suggest;
what the figures do not capture;
why the highest short-term recovery option may still be unsafe; and
which option best balances recovery, evidence and control.
You are not required to perform a full NPV or prepare a new financial model. You must use the
provided figures in 1.3 to interpret the options and explain what the figures do, and do not, prove.
Question 3: Tax, VAT, diesel and payment consequences
15 marks
Amina Patel warns that tax evidence cannot be invented later.
You are not required to calculate VAT or diesel rebates. Evaluate whether KAC has enough evidence to
support VAT input claims, diesel rebate treatment and supplier payments if Marula continues operating.
Address the below in your solution:
VAT input support on Marula invoices;
diesel rebate evidence and mixed activities;
manual weighbridge slips and payment support;
bank verification before payment;
pricing and contract terms that support the payment; and
SARS and audit-trail consequences if evidence is weak.
Question 4: Financing and liquidity judgement
12 marks
The board must fund the recovery without allowing the funding route to distort its judgement.
Evaluate the revolving credit facility, Marula supplier credit and the cash buffer from a liquidity, covenant and
professional judgement perspective.
Address the below in your solution:
the benefit of each funding option;
the professional risk each option creates;
why supplier credit may compromise judgement; and
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CAS3701 | ASSESSMENT 8
which funding approach is most defensible.
You are not required to calculate detailed interest costs.
Question 5: Evidence sufficiency and risk transfer
16 marks
Marula exists. That is not the same as being control-ready.
Assess whether Marula’s appointment is sufficiently evidenced for unrestricted approval.
Address the below in your solution:
what evidence is reliable;
what evidence is useful but incomplete;
what evidence is weak or missing;
who carries risk if the board approves too broadly; and
what board action is required.
Question 6: AI summary, stakeholder voice and responsible judgement
10 marks
The AI-generated summary under 1.10 sounds calm. The evidence underneath it is not.
Critically evaluate whether the AI-generated summary is fair enough to support a board decision.
Your evaluation must address:
what the AI summary gets right;
what it leaves out or softens;
why the Ga-Moraba community voice matters;
what the board must verify before relying on the summary; and
your overall judgement on relying on polished AI wording in board papers as well as reasoning for the answer.
Question 7: Final board decision minute
10 marks
Draft a concise board decision minute replacing the AI-generated approval wording.
The minute must state:
the decision;
the urgency;
the evidence limitations;
the approval conditions;
who must not be left carrying the risk of the recovery (public-interest accountability); and
the 30-day report-back.
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CAS3701 | ASSESSMENT 8
PART C: ANSWER BOOK
Question 1: Real problem and board regularisation decision
Required element
Student response
What management says the problem is
What has already happened and the real board
problem
Commercial urgency evidence
Evidence/control weakness
Two urgent corrections
Recommended board stance
Question 2: Financial option evaluation
Option
Financial effect
Control/evidence
weakness
Professional
judgement
Option A
Option B
Option C
Option D
Final financial recommendation:
Question 3: Tax, VAT, diesel and payment consequences
Issue
Case evidence
Tax/payment
consequence
Evidence required
VAT input support
Diesel rebate evidence
Manual weighbridge slips
and payment support
Bank verification before
payment
Pricing and contract
terms
SARS and audit-trail
consequences
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CAS3701 | ASSESSMENT 8
Conclusion:
Question 4: Financing and liquidity judgement
Funding option
Benefit
Professional risk
Recommendation
Revolving credit facility
Supplier credit from
Marula
Cash buffer
Conclusion:
Question 5: Evidence sufficiency and risk transfer
Evidence item
Classification
Why?
Who carries risk?
Supplier existence
documents
Prior work reference
Insurance and induction
Conflict and bank
verification
Pricing benchmark
Trial loads and manual
weighbridge slips
Diesel logs and VAT
support
Community road-safety
complaint
Board action required:
Question 6: AI summary, stakeholder voice and responsible judgement
AI wording
What it gets right
What it leaves out or
softens
Board verification
required
Wording 1
Wording 2
How the community voice changes the decision:
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CAS3701 | ASSESSMENT 8
Overall judgement: is the summary fair enough to support a board decision? Provide a motivation
for your answer.
Question 7: Final board decision minute
Draft minute:
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CAS3701 | ASSESSMENT 8
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CAS3701 | ASSESSMENT 8
AI-USE AND SOURCE DECLARATION
List every AI tool, search engine, grammar tool or other source that shaped your answer. Write ‘None’ if you used none.
Tool or source
How you verified it
Purpose
Prompt or reference
against the case
PART D: ASSESSMENT RUBRIC
Assessment 8 Rubric
Question 1: Real problem and board regularisation decision
Criteria
Level 1: Not yet
competent
(0 Marks)
Level 2:
Level 3:
Basic/developing
(1 Mark)
Competent pass
(2 Marks)
Level 4: Strong
professional
judgement
(3 Marks)
Maximum
Mark
Mark
Identifies the real
problem
Accepts the
problem as
management
presents it in the
CFO
memorandum and
does not examine
Recognises the
pressure
management
describes but does
not explain how the
sequence of events
before the meeting
Identifies, with
reference to
specific events in
the dossier, what
the board is
actually being
asked to approve
Clearly explains
why the timing of
events changes
the board’s role,
and sets out the
choices this leaves
the board in
3
what has already
happened before
the board was
asked to decide.
changes the nature
of the decision.
and how this
differs from an
ordinary future
approval.
respect of work
already performed.
Uses urgency
evidence
Asserts that the
matter is urgent
Quotes one or two
figures from the
Selects several
relevant financial
Shows how the
indicators connect
3
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CAS3701 | ASSESSMENT 8
Criteria
Level 1: Not yet
competent
(0 Marks)
Level 2:
Basic/developing
(1 Mark)
Level 3:
Competent pass
(2 Marks)
Level 4: Strong
professional
judgement
(3 Marks)
Maximum
Mark
Mark
without drawing on
the dossier.
dossier without
explaining what they
show.
and operating
indicators from
sections: The Red
Dust Decision, 1.1
to 1.2 and explains
why each makes
the matter urgent.
as a chain of
cause and
consequence, so
that the board can
see how an
operating problem
flows through to
the company’s
financial position
and external
obligations.
Uses
evidence/control
weaknesses
States that
documentation is
incomplete without
identifying which
evidence is
concerned.
Identifies one or two
specific gaps only.
Identifies several
specific gaps
drawn from across
the dossier (for
example the
supplier file,
Internal Audit note
and missing
evidence
schedule), not
from a single
source.
Explains why each
gap matters to the
board’s ability to
defend its
decision,
distinguishing the
different kinds of
consequence
(operational, legal,
financial, tax and
social) that a gap
may create.
3
Recommends
stance and
corrections
No clear stance, or
a stance given
without reasons.
Takes a broad
position, but the
corrections
proposed are vague
or general.
Selects one of the
five board
responses named
in the question,
justifies it from the
case, and names
two specific
corrections.
Justifies the
chosen response
and any limits
placed on it, and
prioritises the
corrections by
explaining why
each must be in
3
place before a
particular step
proceeds.
Total
12
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CAS3701 | ASSESSMENT 8
Question 2: Financial option evaluation
Level 4: Strong
professional
Criteria
Level 1: Not yet
competent
Level 2:
Basic/developing
Level 3:
Competent pass
Maximum
Mark
(0 Mark)
(2 Marks)
(3 Marks)
judgement
(4 Marks)
Mark
Interprets
financial effects
Does not use the
figures in section
1.3, or misreads
them.
Repeats figures
from section 1.3 but
mostly lists them.
Reads the
schedule correctly
to establish which
options improve
and which worsen
the short-term
financial position,
and ranks the
options on
financial grounds.
Interprets Options
A-D comparatively,
including the size
and direction of
each effect and
any range or
condition attached
to a figure, and
explains what the
figures do and do
not prove.
4
Assesses
control/evidence
weakness
Ignores
evidence/control
risk.
Refers to controls in
general terms only.
Links each option,
and particularly
the financially
strongest option,
to specific
evidence and
control gaps
recorded
elsewhere in the
dossier.
Explains how
evidence and
control
weaknesses affect
the reliability of
each option’s
financial result,
and why an
option’s
defensibility may
differ from what its
figures alone
suggest.
4
Integrates
financial and
professional
judgement
Chooses purely by
highest amount or
rejects purely by
controls.
Gives a simple
preference with
limited balance.
Explains the tradeoff
between
financial recovery
and
evidence/control.
Reaches a
balanced
judgement that
weighs urgency
against control,
and openly
4
acknowledges the
financial
consequence of
the options not
chosen.
Final
No
Vague
Recommends a Recommends a
3
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CAS3701 | ASSESSMENT 8
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 2:
Basic/developing
(2 Marks)
Level 3:
Competent pass
(3 Marks)
Level 4: Strong
professional
judgement
(4 Marks)
Maximum
Mark
Mark
recommendation
recommendation.
recommendation. plausible option
with reasons.
clearly justified
option, supported
by its financial
effect, the
evidence and
control conditions
it requires, its
community and
road-safety
implications, and
whether the board
could defend it.
Total
15
Question 3: Tax, VAT, diesel and payment consequences
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 2:
Level 3:
Basic/developing
(1 Mark)
Competent pass
(2 Marks)
Level 4: Strong
professional
judgement
(3 Marks)
Maximum
Mark
Mark
VAT input support No VAT
discussion.
Assumes the input
VAT is claimable on
the strength of a
single fact about the
supplier.
Explains the
documentary and
legal requirements
that must be met
before input VAT
may be claimed
and applies them to
the Marula
invoices.
Tests the VAT
position against the
actual state of the
supplier file,
contractual
documents and
evidence of services
received in the
dossier, and
explains how the
3
quality of that
evidence affects the
claim.
Diesel rebate
evidence
No diesel issue. Refers to diesel
records in general
terms only.
Explains why the
nature of the
activities performed
Evaluates the actual
condition of the
diesel records in the
3
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CAS3701 | ASSESSMENT 8
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 2:
Basic/developing
(1 Mark)
Level 3:
Competent pass
(2 Marks)
Level 4: Strong
professional
judgement
(3 Marks)
Maximum
Mark
Mark
matters for diesel
rebate treatment,
and what must
therefore be
recorded.
dossier against the
evidence
requirements, and
explains the
consequences for
KAC if the records
cannot support the
claim.
Supplier payment
support
No payment issue. Mentions payment
risk generally.
Discusses, using
the case facts, how
deliveries are
measured and how
supplier banking
details are
confirmed.
Explains how
weaknesses in
delivery
measurement and
bank verification
combine to create
specific financial,
fraud, tax and audittrail
risks for KAC.
3
Pricing/contract/tax
support file
No pricing/contract
/tax issue.
Notes that
documents are
incomplete without
explaining why this
matters.
Explains why an
agreed pricing
basis and
contractual terms
are needed before
the expense is
accepted.
Explains how the
pricing and
contractual position
affects each later
step (approval,
payment and tax
treatment) and
whether the expense
can be justified
commercially.
3
Overall
tax/payment
conclusion
No conclusion. Generic compliance
conclusion not tied
to the case.
States clearly what
evidence must
exist before claims
are made or
Draws a principled
conclusion on the
relationship between
tax treatment and
3
payments released.
evidence, and
specifies the
conditions under
which emergency
work could continue
without
compromising tax
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CAS3701 | ASSESSMENT 8
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 2:
Basic/developing
(1 Mark)
Level 3:
Competent pass
(2 Marks)
Level 4: Strong
professional
judgement
(3 Marks)
Maximum
Mark
Mark
and payment
integrity.
Total
15
Question 4: Financing and liquidity judgement
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 2:
Level 3:
Basic/developing
(1 Mark)
Competent pass
(2 Marks)
Level 4: Strong
professional
judgement
(3 Marks)
Maximum
Mark
Mark
Revolving facility
analysis
No discussion.
Notes only that the
facility provides
cash.
Explains both the
benefit of the
facility and the cost
or risk it creates.
Relates the
drawdown to
KAC’s covenant
position and
lender relationship
as shown in the
dossier, and to the
conditions under
which the board
would allow the
funds to be used.
3
Supplier credit
analysis
No discussion.
Notes only that
supplier credit helps
cash flow.
Explains the terms
offered in section
1.5 and what they
cost KAC.
Evaluates
whether, and how,
the terms of the
supplier credit
could influence
the board’s
procurement and
approval
3
judgement.
Cash buffer
analysis
No discussion.
Notes only that
using cash avoids
borrowing.
Explains what the
cash buffer is
currently intended
for and what using
it would give up.
Explains the
knock-on effect of
using the buffer on
other parts of an
operation already
3
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CAS3701 | ASSESSMENT 8
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 2:
Basic/developing
(1 Mark)
Level 3:
Competent pass
(2 Marks)
Level 4: Strong
professional
judgement
(3 Marks)
Maximum
Mark
Mark
under pressure,
considering the
plant as a whole.
Funding
recommendation
No
recommendation.
Vague funding
preference.
Recommends a
plausible funding
route with some
reasons.
Recommends a
funding approach
that protects
liquidity and
covenant position
without allowing
the funding source
to influence the
supplier decision,
and links the
funding to the
conditions of the
board’s approval.
3
Total
12
Question 5: Evidence sufficiency and risk transfer
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 2:
Basic/developing
(2 Marks)
Level 3: Competent
pass
(3 Marks)
Level 4: Strong
professional
judgement
(4 Marks)
Maximum
Mark
Mark
Distinguishes
existence from
readiness
Treats Marula as simply
acceptable or
unacceptable.
Lists the documents
in the supplier file
without considering
what they can and
cannot prove.
Explains the
difference between
evidence that a
supplier exists and is
in good standing,
Assesses each
category of
document in the
supplier file against
what the board
4
and evidence that it
is ready to perform
safely and lawfully.
actually needs to
know, and explains
specifically what the
formal documents
leave unproven.
Assesses
Generic reference to
Identifies one or two
Identifies several Explains the
4
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CAS3701 | ASSESSMENT 8
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 2:
Basic/developing
(2 Marks)
Level 3: Competent
pass
(3 Marks)
Level 4: Strong
professional
judgement
(4 Marks)
Maximum
Mark
Mark
weak/missing
evidence
missing documents.
gaps.
specific gaps drawn
from across the
supplier file, Internal
Audit note and
missing evidence
schedule.
consequence of
each gap for the
different areas for
which the board is
accountable, rather
than simply listing
what is missing.
Explains risk
transfer
No risk transfer.
Refers to
stakeholders in
general terms.
Identifies KAC and
at least one other
named party who
would bear risk.
Explains concretely
how specific risks
would pass to
identified parties
inside and outside
KAC, and what
each party stands to
lose.
4
Board action
required
Generic controls.
Recommends
obtaining documents
without linking them
to the decision.
Recommends board
action that ties any
approval to the
evidence still
outstanding.
States what the
board should not
approve, what it
may approve and
within what limits,
and specifies the
conditions, across
each area of risk
identified, that must
be satisfied and
who must confirm
them.
4
Total
16
Question 6: AI summary, stakeholder voice and responsible judgement
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 3: Strong
Level 2: Competent pass
(1 Mark)
Maximum
Mark
Mark
professional judgement
(2 Marks)
What AI gets right
No engagement
Identifies which aspects of Explains what the summary
2
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CAS3701 | ASSESSMENT 8
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 2: Competent pass
(1 Mark)
Level 3: Strong
professional judgement
(2 Marks)
Maximum
Mark
Mark
management’s case the
captures fairly and assesses
OR
summary reflects
accurately.
how far it represents the full
position in the dossier.
Generic comment about
AI.
Omissions in wording Generic
OR
Identifies specific facts from
the dossier that the
summary omits or
understates.
Quotes at least two phrases
from the summary and
explains how the choice of
wording softens uncertainty
or evidence weakness.
2
Identifies omissions in
broad terms.
Community voice
Ignored
OR
Explains why the
community complaint in
section 1.8 is relevant to
the board’s decision.
Generic stakeholder
statement.
Shows how the community
evidence should change the
conditions of the board’s
decision, rather than being
noted as a stakeholder
consideration only.
2
Board treatment of AI None
OR
States that the summary
must be verified against the
dossier evidence.
Rejects AI in general
terms.
Sets out what role AI may
play in board papers, and
specifies what the summary
must be corrected to
disclose before the board
relies on it.
2
Digital judgement
None.
OR
Reasonable scepticism. Mature judgement on how
fluent, confident wording
can shape a board’s reading
of uncertain evidence.
2
Basic warning.
Total
10
Question 7: Final board decision minute
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 3: Strong
Level 2: Competent pass
(1 Mark)
Maximum
Mark
Mark
professional judgement
(2 Marks)
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CAS3701 | ASSESSMENT 8
Criteria
Level 1: Not yet
competent
(0 Mark)
Level 2: Competent pass
(1 Mark)
Level 3: Strong
professional judgement
(2 Marks)
Maximum
Mark
Mark
Clear decision
No decision
Clear decision with
Board-ready decision that
2
conditions.
OR
states its scope and the
period for which it applies.
Vague response
.
Urgency and
evidence limits
Ignores one side
OR
Recognises urgency and
evidence limits.
Records both the urgency
and the evidence limitations
accurately, in board-minute
language.
2
Mentions both vaguely.
Key conditions
None provided
Practical.
OR
Specific, verifiable
conditions covering each
area of risk identified in
Questions 1 to 6.
2
Generic.
Public-interest
accountability
None provided
OR
Community and safety
considerations included.
States the board’s
accountability for who bears
the consequences of the
recovery, naming the parties
concerned.
2
Generic stakeholder
point.
Report-back
None provided
Practical report-back.
OR
Generic monitoring.
Specific 30-day report-back
naming the matters,
measures and assurance
the board will require in
order to review its decision.
2
Total
10
8. Communication rubric
Criteria
Level 1
(0 Mark)
Level 2
(1 Mark)
Level 3
(2 Marks)
Maximum
Mark
Mark
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CAS3701 | ASSESSMENT 8
Criteria
Level 1
(0 Mark)
Level 2
(1 Mark)
Level 3
(2 Marks)
Maximum
Mark
Mark
Structure and use
of answer template
Disorganised; does
not follow the task
Mostly follows the
template.
Clear, disciplined
use of the template.
2
OR
Some structure but
uneven.
Use of case
evidence
Generic answer with
little case evidence
Relevant evidence
used.
Case evidence is
integrated into
judgement.
2
OR
Limited case
evidence.
Professional tone
Informal, vague or
emotional
Mostly professional. Board-appropriate
and concise.
2
OR
Basic but
understandable.
Critical-thinking
flow
Lists issues without
reasoning
Clear movement
from evidence to
judgement.
OR
Strong, disciplined
movement from
evidence to
accountable
recommendation.
2
Some reasoning but
limited integration.
Avoids generic /
AI-style writing
Generic phrases
dominate
Mostly casespecific.
Specific,
grounded,
human professional
writing.
2
OR
Some case-specific
detail.
Total
10
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CAS3701 | ASSESSMENT 8
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