Medura Group, a prominent conglomerate in the tech sector, is known for developing and exporting software solutions, mobile applications, and cybersecurity tools. Medura Tech, the group's flagship company, has aggressive

Medura Group, a prominent conglomerate in the tech sector, is known for developing and exporting software solutions, mobile applications, and cybersecurity tools. Medura Tech, the group's flagship company, has aggressively acquired start-ups' and mid-sized companies over recent years to expand its footprint. The group's subsidiaries and associates also export specialized software, hardware components, and IT consulting services to the USA, Europe, and other regions. To support this expansion. Medura relied on significant credit and banking facilities provided by a consortium of banks led by Global Fin Bank. The group's Chief Financial Officer, Aryan, had been with Medura for over a decade, managing financial strategies and operations. His close relationship with management meant that his decisions were rarely questioned. As Medura continued to grow, it sought private equity investment. Innovate Capital, a leading PE fund, showed interest due to the group's impressive growth. To proceed, Innovate Capital hired Nexus Advisors to perform financial and operational due diligence. Nexus Advisors conducted a thorough evaluation and presented their findings to Innovate Capital. However, when Eva, the Chief Investment Officer of Innovate Capital, reviewed the report, she was deeply concerned. As she and her team discussed the findings, her colleague Sam highlighted several alarming issues : Global Fin Bank had been discounting Medura's export invoices against Letters of Credit (LCs) from reputable banks on behalf of international buyers, with proceeds credited to Medura's account on the same day. However, payment delays occurred, and the bank extended due dates at Medura's request. Customs records revealed that many reported exports never happened. Software supposedly developed for export under Working Capital Credit was either not produced or sold domestically, or funds were misappropriated. Out of 2,100 outstanding invoices, 2,000 had no matching export records. Medura confirmed export completion to banks by submitting falsified certificates from auditors and accountants, along with inaccurate status reports. The audited financial statements showed inaccurate cash flow figures, failing to reflect the company's true financial state. One of Medura's subsidiaries had submitted the same export orders to several banks in the consortium, securing working capital credits without providing the necessary export documentation. Medura used fictitious export orders to hedge against foreign exchange receivables and payables, misleading the banks. Most receivables were from foreign buyers, but payments came from third parties, indicating that goods might have been sold to alternate buyers at renegotiated prices. The company also submitted fake and forged export invoices for discounting. The creditor list included fabricated suppliers, artificially inflating purchases and payables to create a misleading financial position. Alarmed by these findings, Eva informed Innovate Capital's management, leading them to withdraw from the investment. Additionally, Eva anonymously notified Global Fin Bank about the fraudulent activities. Global Fin quickly convened a consortium meeting and appointed Suresh, a forensic auditor, to investigate. Questions: Is Medura's auditor's claim that they were merely following management's instructions justified? Discuss potential legal consequences for the auditors.