Mr. Arjun was appointed as the engagement partner on behalf of Sapphire & Associates, a Chartered Accountant firm, to conduct the statutory…

Mr. Arjun was appointed as the engagement partner on behalf of Sapphire & Associates, a Chartered Accountant firm, to conduct the statutory audit of Orion Electricals Limited, an unlisted public company engaged in the manufacture of electrical equipment. During the audit, CA Tiya, a senior member of the engagement team, was assigned the responsibility of examining matters relating to the requirements of CARO, 2020. Her major observations were as follows: One of the buildings owned by Orion Electricals Ltd. was revalued during the year based on a valuation report issued by a registered valuer. As a result, the aggregate carrying amount of Property, Plant and Equipment (PPE) increased from ₹ 13.2 crore to ₹ 15.8 crore. Orion Electricals Ltd. was sanctioned a cash credit limit of ₹ 5.40 crore by National Commercial Bank, secured against its current assets. The limit was reduced to ₹ 4.80 crore after six months. The company submitted quarterly stock statements to the bank, and the statements were found to be in agreement with the books of account. Meanwhile, Sapphire & Associates was also appointed to conduct the audit of a State Housing Department. During the course of audit, the Office of the Comptroller & Auditor General of India (C&AG) observed that the applicable State law defined a "flat" on the basis of the following two criteria in a premises: Dwelling units exceeding a specified threshold; and Buildings having a total area surpassing a specified threshold. However, the relevant database did not contain a field for recording the area of the building. Consequently, certain buildings were classified as flats merely on the basis of the number of dwelling units, even though they had fewer dwelling units below the prescribed threshold limit. Since information regarding the area was unavailable, the audit team directed physical verification of such flats. The physical verification revealed that these buildings had been incorrectly classified as flats, resulting in short collection of water charges by the department. Further, CA Sameer, another partner of the firm, was engaged in the audit of Hydra Power Limited, a listed company engaged in thermal power generation. As part of its Business Responsibility and Sustainability Reporting (BRSR), the company disclosed information regarding its total greenhouse gas emissions from its production facilities during the year and a detailed plan for its projected energy consumption in the coming years. CA Pooja, an independent Chartered Accountant who had recently completed a Certificate Course on Sustainability Reporting, was approached by CA Sameer for informal guidance on improving the company's sustainability disclosures. Impressed by her knowledge, CA Sameer subsequently recommended her name for appointment to the Board of Management of Pragati Co-operative Bank, a Primary (Urban) Co-operative Bank, which was also an audit client of the firm. CA Rahul, another professional colleague, advised Pooja not to accept the position, stating that such acceptance could amount to professional misconduct. Based on the above facts, answer the following MCQs: