Mr. Vivek was appointed as the engagement partner on behalf of Reliant & Co., a Chartered Accountant Firm, to conduct statutory audit assignment…

Mr. Vivek was appointed as the engagement partner on behalf of Reliant & Co., a Chartered Accountant Firm, to conduct statutory audit assignment of Zenith Components Limited, an unlisted public company engaged in the manufacturing of electrical equipment. During the audit, CA Meenal, one of the senior engagement team members, was given the responsibility to audit the matters as per requirements of CARO, 2020. Her major observations included: One of the buildings owned by Zenith Components Ltd. was revalued during the year based on a valuation report from a registered valuer, increasing the aggregate carrying value of Property, Plant & Equipment (PPE) from 12.5 crore to 14.5 crore.Zenith Components Ltd. was sanctioned a cash credit limit of 5.25 crore by Unity Bank based on the security of current assets which was reduced to 4.95 crore after 6 months. In this connection, the company submitted quarterly stock statements to the bank which were in agreement with the books of accounts. Meanwhile, Reliant & Co. was also appointed to conduct the audit of a State Housing Department. During the course of audit, Office of the Comptroller & Auditor General of India (C&AG) observed that the prescribed law in the state defined a "flat" based on the following two criteria in a premises: Dwelling units exceeding a threshold limit.Buildings with a total area surpassing a threshold limit. However, it was noted that the relevant database did not include a column for entering the area of the building. Consequently, a certain number of buildings were identified as flats even though they had fewer dwelling units than the threshold limit. In the absence of data regarding the area, the audit team directed physical verification of these flats. The physical verification confirmed that these buildings were incorrectly classified as flats, resulting in the department under collecting water charges. Further, CA Karan, another partner, was engaged in the audit of EcoTherm Power Ltd., a listed company operating in the thermal energy generation sector. As a part of Business Responsibility and Sustainability Reporting (BRSR), the company disclosed data on its total greenhouse gas emissions from its production outlets during the year and a detailed energy consumption plan which it had devised for the upcoming years. CA Nisha, an independent Chartered Accountant who had recently completed a Certificate Course on Sustainability Reporting, was approached by CA Karan for informal guidance on improving the company's sustainability disclosures. Impressed by her knowledge, CA Karan later recommended her name for the Board of Management of Navlok Co-operative Bank, a Primary (Urban) Co-operative Bank, which was also one of their audit clients. CA Amit, another professional colleague, advised Nisha to refrain from accepting the post as it could amount to professional misconduct. Based on the above facts, answer the following MCQs: