determine its proper allowance for loan losses
Among the prescribed audit activities provided below, which of the following would effectively help Metro bank determine its proper allowance for loan losses?
a. Make visits to the borrower's commercial business site periodically.
b. Have procedures in place to identify problem loans in a timely fashion.
c. Identify any weaknesses in the institution's lending process.
d. Obtain additional collateral for a loan.
When assessing the reasonableness of PNB's allowance for loan losses as a whole, you discovered that his estimate differs from the recorded allowance and that the difference is immaterial. How should you address this finding in your audit?
a. Reconsider the precision of his estimate
b. Record it on the summary of audit differences.
c. Propose an adjustment.
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