Fresh Farm Foods Ltd., a reputed food processing company, engaged Ravi & Mehta Chartered Accountants, to provide limited assurance on its Social…

Fresh Farm Foods Ltd., a reputed food processing company, engaged Ravi & Mehta Chartered Accountants, to provide limited assurance on its Social Responsibility Report for the year ended 31st March 2025. The report prepared covered the company's initiatives on waste reduction, water conservation and community welfare. As part of the engagement, the assurance team visited multiple factory locations, reviewed internal sustainability data and interviewed employees and local community representatives. The engagement was carried out in accordance with the Standard on Assurance Engagements (SAEs) to evaluate whether the report was free from material misstatement. While reviewing team behaviour during the engagement, the partner noted concerns regarding ethical and independence compliance, one team member had accepted significant gift and hospitality from the client and another had taken loan from the client. The partner decided to assess these matters in light of the ethical requirements. Simultaneously, Ravi and Mehta were conducting the statutory audit of Fresh Farm Foods Ltd. for the same year. The company has finalized its financial statements for the year ended 31-03-2025, and in the board meeting held on 15th April 2025, the directors declared a dividend for the financial year 2024-25. During the audit, it was noted that the accountant had recognized the dividend as a liability as at 31st March 2025, on the reasoning that the dividend belongs to the year 2024-25. The auditor must now determine whether recording such a dividend as a liability in the financial statement for the year ended 31st March 2025 is appropriate. Based on the case study, answer the following questions: (6 to 9)