Simran Edible Oil Limited is a public company which has the business of manufacturing cooking oil. The company is in this particular business since…

Simran Edible Oil Limited is a public company which has the business of manufacturing cooking oil. The company is in this particular business since last 25 years. The financial results of the company for the previous year FY 2022-23 are as under: Sr. No. Particulars Amount 1. Aggregate Outstanding Loans, debentures and deposits 10 crore 2. Turnover of the company 100 crore 3. Paid-up capital of the company 50 crore 4. Net Profit (after tax) of the company 5 crore For the year 2022-23, M/s Pesh & Associates were the auditors of the Company. The auditors found significant deficiencies in internal control and misrepresentation of amounts in the area of Trade Payables. Therefore, the Auditor issued qualified Audit Report. Next year, management did not wish to re-appoint the same auditors, hence, Board of Director recommended Ms. Mansi as the Statutory Auditor for FY 2023-24 to the members of the Company. After the appointment, Ms. Mansi went through previous year financials statements, audit report etc. and emphasised the understatement of Trade Payable balance as a significant audit risk. The auditor set the materiality at 15,00,000 for conducting audit of the year 2023-24. Further, Ms. Mansi is in process of selecting the samples for testing so as to get the samples on which Vendor Balance Reconciliations can be performed, she is considering the following for the same: (i) Major Vendors where the confirmation balances agrees to General Ledger. (ii) Vendors which have high volume of business with Simran Edible Oil Limited. (iii) Vendors with balances of 15,00,000 or more outstanding at the year end. (iv) Vendors with balances of 15,00,000 or less outstanding at the year-end. As at March 31st, 2024, the balance of two vendor as per company's General Ledger and as per the balance of the External Confirmation which are received from vendors are as under:- Vendor Name Balance as per General Ledger Balance as per External Confirmation Pakhi Groundnut Seeds Limited 15,00,000 20,00,000 Krishi Sunflower Seeds Limited 65,00,000 80,00,000 Pakhi Groundnut Seeds Ltd.: The difference in the balance is due to one of the order received by the Company. This order is under dispute as the Company claims that the received raw material is of sub-standard quality. The consignment received was sent back to the vendor on March 30, 2023. Krishi Sunflower Seeds Ltd.: The difference in the balance is due to the reason of two invoices of 10,00,000 and - 5,00,000 dated March 25, 2024 & March 27, 2024 respectively. As per the Accounts Payable Executive, both the invoices were received on April 03rd, 2024 and therefore, those were not recorded in the financial statement for the year ended March 31st, 2024. Ms. Mansi took the samples to verify Trade payable balances, which covered 30% of population. During the Audit, she came across 2 errors amounting to 12,00,000: 4,00,000 was due to one invoice not being recorded due to weak inefficient control mechanism; and 8,00,000 error was made by Mr. Dhruv, an executive who came as a temporary replacement for one week in the place of Ms. Kamini, who is permanent accountant of the company. The mistake was clerical in nature. Based on the above facts, answer the following: