Patrika & Co., Chartered Accountants, has been appointed as the statutory auditor of AVR Retails Pvt. Ltd., a company engaged in business of…

Patrika & Co., Chartered Accountants, has been appointed as the statutory auditor of AVR Retails Pvt. Ltd., a company engaged in business of electronics, for the financial year 2024-25. The firm is auditing financial statements of AVR Retails Pvt. Ltd. for the first time. During the audit, the auditor made the following observations: The company operates through multiple retail outlets with heavy volumes of cash and card sales.Store managers are allowed to approve cash discounts and product returns independently.Reconciliations between POS records and bank deposits are not done regularly.The IT system used by AVR does not log any changes to inventory records, making it difficult to track adjustments.The company has an internal auditor, but this auditor does not report directly to senior management.During internal audit, it was found that the automated system failed to charge 12% interest on overdue customer payments due to a technical glitch.During audit documentation, an audit assistant saved working files in unsecured folders and did not mention the reviewer's name in the file.After signing the audit report, a senior audit team member altered the inventory sampling sheet to reflect a different method, without recording the reason or the date of change.