MA & Associates, a Chartered Accountant firm is appointed as an auditor of XYZ Pvt. Ltd. Amit, partner of the firm, has recently bought stock in…

MA & Associates, a Chartered Accountant firm is appointed as an auditor of XYZ Pvt. Ltd. Amit, partner of the firm, has recently bought stock in XYZ Pvt. Ltd. He believes that the company's goodwill will increase after the audit report is finalised, which could lead to a rise in stock price. As he reviews the company's financial statements, Amit decides to give unmodified opinion to help his investment. During the audit of trade receivables, Amit selects a sample using a technique that ensures larger balances have a higher chance of being selected. However, this approach results in the exclusion of many smaller balances, potentially overlooking some crucial misstatements. Meera, another Partner of Firm, is reviewing calculation of software development costs method adopted by XYZ Pvt. Ltd. Meera helped in creating this method earlier. She worries that her previous involvement in this method might affect her ability to review it. Meanwhile, Raj, the CEO of XYZ Pvt. Ltd., has requested them to modify certain disclosures in the financial statements in a way that could mislead stakeholders. He argues that a more favourable presentation will help the company secure additional investments. Meera feels that complying with this request would compromise ethical standards and worries about potential conflicts with the client. Based on the above facts, answer the following: -