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      Question

      While auditing a bank’s loan portfolio, the auditor

      notices multiple restructuring cases of SME accounts in the same quarter. What should be the key audit focus?
      A Bank's branch expansion Correct Answer Incorrect Answer
      B Income recognition Correct Answer Incorrect Answer
      C Provisioning and classification Correct Answer Incorrect Answer
      D ATM reconciliation Correct Answer Incorrect Answer
      E Statutory reserves Correct Answer Incorrect Answer

      Solution

      Restructured accounts may mask NPAs. The auditor must check whether the loans have been correctly classified as per IRAC norms and adequate provisions made.

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