You are the auditor of Plus Bank Limited. The bank has made following provisions for the year ended on 31.03.2024: Particulars Amount (₹ in crores)…

For audit of provisions and contingencies the auditor should: ensure that the compliances for various regulatory requirements for provisioning as contained in the various circulars have been fulfilled.obtain an understanding as to how the bank computes provision on standard assets and non-performing assets. It will primarily include checking the basis of classification of loans and receivables into standard, sub-standard, doubtful, loss and non-performing assets. The auditor may verify the loan classification on a sample basis.obtain the detailed break up of standard loans, non-performing loans and agree the outstanding balances with the general ledger.obtain the tax provision computation from the bank's management and verify the nature of items debited and credited to profit and loss account to ascertain that the same are appropriately considered in the tax provision computation.examine the other provisions for expenses vis-a-vis the circumstances warranting the provisioning and the adequacy of the same by discussing and obtaining the explanations from the bank's management. Or (a) (i) Meaning of Deficiency in internal control: This exists when - (1) A control is designed, implemented or operated in such a way that it is unable to prevent, or detect and correct, misstatements in the financial statements on a timely basis or (2) A control necessary to prevent, or detect and correct, misstatements in the financial statements on a timely basis is missing. (ii) As per SA 265, While pointing out significant deficiencies in internal control, auditor has not only to communicate significant deficiencies giving their description but also explain the potential effects and sufficient information to those charged with governance and management to understand context of communication. Therefore, the above communication is not proper. Not only significant deficiency has to be communicated, it should also be explained to management the potential effects of transactions with firm in which the directors are interested. It should explain that such a significant deficiency can lead to misstatement of transactions with related party. Highlighting importance of such a control, it should be stated that responsibility be fixed for concerned persons for adhering to such an important control.