Economics · Auditing
Consider the following statements regarding bank branch inspection: Statement 1: A bank capitalizes the cost of a new software license amounting to 50 lakh rupees and depreciates it over 10 years, in accordance with its internal policy. Statement 2: The branch receives an insurance commission in cash from an insurance company and credits it directly to the Staff Welfare Fund instead of the Profit and Loss account to avoid taxation. Statement 3: When verifying bills for collection, it is noted that the branch has not maintained proper due date records, leading to delays and potential loss of customer interest. Which of the following describes the correct situation of non-compliance or irregularities among the statements?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1All statements are fully compliant and correct.
- 2Only Statement 1 and Statement 3 reflect procedural irregularities.
- 3Only Statement 2 and Statement 3 reflect serious accounting or operational irregularities.✓
- 4Only Statement 1 and Statement 2 reflect operational irregularities.
Correct answer
Only Statement 2 and Statement 3 reflect serious accounting or operational irregularities.
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