One of the key tasks of bank auditors is to consider the amount of the loan loss reserve.When developing a model to estimate the current year's loan loss reserve amount,which of the following would be least likely to be included as an independent variable?
A) Original loan approval amount
B) Customer loan history
C) Current aged loans
D) Collections success

Question

Quizplus · Accepted Answer

The original loan approval amount is a static variable and does not provide any indication of the current risk level of the loan portfolio. The other independent variables are more relevant to estimating the current year's loan loss reserve amount, as they provide information on the historical performance and current status of the loans.

One of the Key Tasks of Bank Auditors Is to Consider