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Insurance Companies
Authoritative documents involved as:
The major legislation governing insurance companies and their conduct is the Insurance Act
Key audit areas as: For an insurance company these are as:
1. Investments or
2. Unearned premiums,
3. Expired dangers, this is while a category of business has confirmed to be unprofitable provision is made for future losses on risks previously accepted,
4. Outstanding claims,
5. Ascertainment of creditors and debtors,
6. Actuarial valuation re: life insurance.
Insurance companies such as banks are subject also to particular exempting provisions in the Insurance Act and in the Companies Act. Unlike banks, not only do they take advantage of the special provision however are in fact required through the Commissioner to obtain benefit of the provisions. The auditor therefore, in practice provides two audit reports for an insurance company and is also necessary to sign various reports such are submitted to the Commissioner of Insurance. The insurance company arranges statutory accounts that are audited in the common way and a fair and true view report provided and these are submitted to the members in the general way and adopted and dividends paid on their strength. The Commissioner after that requires accounts to be prepared in accordance along with insurance regulations taking benefits of creating secret reserves. Also these are audited and reported on accordingly through the auditor however not in fair and true view terms however rather through simply stating compliance along with the insurance act.
An auditor is conducting an audit of the financial statements of a wholesale cosmetics distributor with an inventory consisting of thousands of individual items. The distributor ke
Procedures that Auditor Adopts The auditor’s procedures will include: (1) Getting an understanding of the entity as a whole in order to see the accounting system in proper per
Providers of Funds A further point to note is that modern companies can be very large with multinational activities. Preparing accounts for such a group becomes a very complex
Principles of Auditors Procedures i. The financial statements should be prepared on the source of conditions existing on the balance sheet date. ii. The material post balance
Forms of evidence a) Observation: is usually witnessing internal control and book-keeping procedures. It includes attendance at wages pay out. Observation of stock-take, open
Detail work on stocks - Audit of Current Assets Detail work on stocks is imperative in an audit, since there are other review tests that are equally important and these includ
Judgmental Sampling The Judgement sampling is where, auditor using his own experience and awareness of the client's business and situations selects the sample to be tested with
what is internal audit standardizes.
discuss the 4 stages of data processing in an accounting information system
Why is studying Auditing different from studying other accounting topics?
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