Q2. Pain Ltd was formed on December 18, 2019, via the merger of Agony International and Tension, Inc. The company owns the rights to franchises and brands including Fake, Forged, Phony, Sham, Replica and Bogus. The consolidated entity got off to a bad start when it was revealed that Agony International executives had been committing widespread and systemic accounting fraud with intent to deceive investors. When the company announced that it had discovered potential accounting irregularities the stock dropped from INR 360 to INR 190 per share. Eventually the stock would fall to as low as INR 60 per share as the company struggled to convince investors about management's integrity. According to the company's own investigation, Agony International executives had inflated earnings by over INR 650 million over a three-year period using several tactics, including: (1) failing to timely record returned credit card purchases and membership cancellations, (2) improperly capitalizing and amortizing expenses related to attracting new members, and (3) recording fictitious sales. Required (not more than half a page in legible writing, additional pages will simply be unread): a) For each of three fraudulent tactics employed by Agony International, identify an analysis technique that could have identified the accounting improprieties. b) Both the investors and the management of Tension Inc. had relied on audited financial statements in making decisions regarding Agony International. What do you believe was the external auditor's culpability in not detecting these fraudulent practices