LMN & Associates, Chartered Accountants, a leading firm in providing assurance services, is in the course of finalizing various audit…

LMN & Associates, Chartered Accountants, a leading firm in providing assurance services, is in the course of finalizing various audit assignments. The audit team has 5 audit assistants in addition to the engagement partners. They are appointed as statutory auditors of DEF Finance Limited for the F.Y. 2024-25. This is an Investment and Credit Company (ICC) incorporated in March 2020. The company has total assets of 1,200 crores as on 31st March, 2024, with financial assets constituting 65% of total assets (netted off by intangible assets). The company's income from financial assets is 58% of its gross income. The company applied for RBI registration in April 2024 and currently has Net Owned Funds (NOF) of 8 crores. The company has been operating without RBI registration since inception. LMN & Associates are also the statutory auditor for the F.Y. 2024-25 of SH Finance Limited; a Non-Banking Finance company registered with RBI under the Middle Layer category. The company is primarily engaged in providing loans and advances to small and medium enterprises (SMEs) and individuals. During the course of audit CA L, the engagement partner observed that the company has classified a demand loan of 3.8 crores to RR Traders as NPA. This loan became NPA on 1st September, 2023. The estimated realizable value of security is 2.2 crores and the company has made a provision of 1.6 crores (₹ 1.6 crores = 100% of unsecured portion). He also observed that the company has invested in approved liquid assets worth 45 crores and held them in safe custody at its own premises. During the audit process of the above companies, the engagement partners have assigned the responsibility of various areas to the audit assistants including signing of documents on behalf of the firm where need arises keeping in view the clarifications issued by the Council as envisaged in the provisions of the Chartered Accountants Act 1949. One of the audit assistants has signed the following documents and conducted under mentioned jobs during audit of DEF Finance Ltd.: (i) Issued the notes to accounts and cash flow statement ultimately finalized for onward submission. (ii) Asking for information or issue of questionnaire. (iii) Acknowledging and carrying routine correspondence with clients. (iv) Issued non-financial report expressing professional authentication. CA N, the engagement partner of MT Industries Limited, while conducting a comprehensive review of the audit trail functionality and related controls, observed that multiple employees use common User IDs for processing routine transactions to improve efficiency. Changes made to the audit trail configurations in the past are not formally documented or authorized through a defined approval process. During the course of audit of Global Reach Ltd., an Indian parent company, CA L prepares the consolidated financial statements for the year ended 31st March, 2025. In his opinion the following informations given in the notes to the separate financial statement need not be included in the consolidated financial statement under IND (i) Source from which bonus shares are issued (e.g., capitalization of profits or reserves or from securities premium account). (ii) Disclosure required under Micro, Small and Medium Enterprises Development Act, 2006 (iii) Disclosure of all utilized monies out of the issue indicating the form in which utilized funds have been invested. (iv) Earnings in foreign exchange classified as export of goods not calculated on F.O.B. basis. Based on the above facts, answer the following Q. Nos 7 to 12 by choosing the right option: