CA. Ashu is in midst of finalising audit reports of four clients. On reviewing each file, it is noticed as under: [A] With respect to a company…

CA. Ashu is in midst of finalising audit reports of four clients. On reviewing each file, it is noticed as under: [A] With respect to a company engaged in business of selling of agricultural products which are outside ambit of GST, the engagement team has found that substantial part of revenue of the company (about 75%) is generated through cash sales. However, there is no proper system and internal control to verify accuracy of revenue generated through cash sales. Therefore, the team has been unable to verify such revenue generated through cash sales. [B] Another client, Grow Limited has been dragged to court by Glow Limited for stealing its trade secrets using cyber theft and filed a claim for 52 crore. On reviewing audit file of Grow Limited, CA Ashu finds that legal opinion of company's standing counsel is ambiguous. There are precedent case laws both in favour and against on such issue. The financial statements of Grow Limited are silent on this litigation matter. [C] It is noticed on review of audit file of a client that net profit before tax was - 2.10 crore on a turnover of 100 crore. There is an export receivable from a chain of stores outstanding in financial statements of 3.20 crore for which there is no chance of recovery. The said chain of stores has gone bankrupt. There is also no hope of recovering money through ECGC (Export credit Guarantee Corporation) due to certain technical issues. Debt has not been written off by the client despite being communicated to client. [D] On reviewing file of a client, it is noticed that team was not informed about finished goods of 1.10 crore lying at a location taken on rent in March 2025. The said issue was flagged at time of reconciling inventories by the team. Hence, the audit team could not attend physical inventory counting. The alternative procedures cannot be performed in absence of adequate records pertaining to above location. Total inventories reflected in financial statements is 8.5 crores. PBT of client is 10 crores.