Question

A forensic audit of Company XYZ reveals that out of its total annual sales of ₹200 Crore, ₹150 Crore worth of transactions were conducted with three proprietary firms owned by the promoter's immediate family members. Furthermore, Company XYZ shows an outstanding trade receivable of ₹90 Crore due from these specific firms, with no actual cash settlement taking place for over a year. How is this signal classified under the bank's Red Flagged Accounts (RF

  • A framework?
A Disproportionate increase in other current assets
B Large number of transactions with inter-connected companies and large outstanding from such companies
C Significant increase in working capital borrowing as a percentage of turnover
D Critical issue highlighted in the stock audit report
E Fictitious export trade financing
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