Vistara Lifesciences Ltd., a listed company engaged in the research, manufacture and sale of specialised pharmaceutical products, has appointed M/s…

Vistara Lifesciences Ltd., a listed company engaged in the research, manufacture and sale of specialised pharmaceutical products, has appointed M/s Kavish & Co., Chartered Accountants, as its statutory auditors for the financial year 2025-26. The company has recently undertaken substantial expenditure on research and development of a new drug. During the year, it capitalised ₹ 96 crore relating to development expenditure, stating that the technical feasibility of the product had been established and that the remaining regulatory approvals were expected shortly. During the audit planning process, the engagement team noted that the company operates in a highly regulated industry and that the accounting treatment of development expenditure involves significant management judgement. However, none of the members of the engagement team possessed specialised knowledge of pharmaceutical development or regulatory approval processes. The Finance Director informed the audit team that all necessary technical assessments had already been carried out by the company's internal scientific team and, therefore, no further technical evaluation was necessary from the auditor's side. Further, the audit team observed that supporting documents relating to clinical trials and regulatory submissions were provided almost six weeks after being requested. The engagement partner initially decided not to communicate the delay to those charged with governance since the documents were eventually received before completion of the audit. As part of the firm's quality control system, an engagement quality review is required for the audit of Vistara Lifesciences Ltd. The review is assigned to CA Nitin, a senior partner of the firm. CA Nitin is not a member of the engagement team and has not participated in any audit decision relating to the company. During the year, CA Nitin also assisted the firm in preparing its own GST returns. This internal assignment had no connection with Vistara Lifesciences Ltd. or its audit. The audit team also identified a ₹ 50 lakh payment to a newly incorporated consultancy entity two days before the year-end. The invoice merely stated, "consultancy services". The registered address of the consultant was the residential address of an employee of the finance department. The CFO stated that the consultant was genuine and that the payment was made for legitimate services. Based on the above facts, answer the following MCQs: