Audit and Accounting Guide: Property and Liability Insurance Entities 2016
American Institute of Certified Public Accountants (Verlag)
978-1-943546-84-8 (ISBN)
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In addition, it will help you:
Understand current GAAP and statutory accounting for property and liability insurance entities.
Get authoritative accounting and auditing guidance applicable to property and liability insurance entities.
Properly develop an audit plan for auditing loss reserves.
Easily educate your staff on property and liability insurance.
Founded in 1887, the American Institute of Certified Public Accountants (AICPA) represents the CPA and accounting profession nationally and globally regarding rule-making and standard-setting, and serves as an advocate before legislative bodies, public interest groups and other professional organizations. The AICPA develops standards for audits of private companies and other services by CPAs; provides educational guidance materials to its members; develops and grades the Uniform CPA Examination; and monitors and enforces compliance with the accounting profession's technical and ethical standards. The AICPA's founding established accountancy as a profession distinguished by rigorous educational requirements, high professional standards, a strict code of professional ethics, a licensing status and a commitment to serving the public interest.
1 Nature, Conduct, and Regulation of the Business 01-98
General Nature of the Business 01-03
Kinds of Insurance 04-08
Legal Forms of Organization 09
Methods of Producing Business 10-17
Major Transaction Cycles 18-36
Underwriting of Risks 18-27
Pooling, Captives, and Syndicates 28-30
Processing and Payment of Claims 31-32
Investments 33-36
Accounting Practices 37-98
State Insurance Regulation 37-45
National Association of Insurance Commissioners 46-47
Federal Regulation Securities and Exchange Commission 48-53
Federal Regulation The Dodd-Frank Wall Street Reform and Consumer Protection Act 54-64
Federal Regulation Terrorism 65-69
Industry Associations 70
Statutory Accounting Practices 71-89
Generally Accepted Accounting Principles 90-97
Comparison of SAP and GAAP 98
2 Audit Considerations 01-186
Introduction 01
Scope of the Audit Engagement 02-14
General Considerations 02-04
PCAOB Integrated Audit of Financial Statements and Internal Control Over Financial Reporting 05-09
Additional PCAOB Audit Standards 10-14
Planning and Other Auditing Considerations 15-73
Audit Planning 16-17
Audit Risk 18-22
Risk Assessment Procedures 23-28
Understanding the Entity, Its Environment, and Its Internal Control 29-47
Common Industry Ratios and Performance Metrics 48-60
Identifying and Assessing the Risks of Material Misstatement 61-64
Performing Audit Procedures in Response to Assessed Risks 65-71
Use of Assertions in Obtaining Audit Evidence 72-73
Other Risk Assessment Activities and Considerations 74-78
Planning Materiality 74-76
Performance Materiality and Tolerable Misstatement 77-78
Consideration of Fraud in a Financial Statement Audit 79-80
Insurance Industry Fraud Risk Factors 81-103
The Importance of Exercising Professional Skepticism 83
Discussion Among Engagement Personnel Regarding the Risks of Material Misstatement Due to Fraud 84-87
Obtaining the Information Needed to Identify the Risks of Material Misstatement Due to Fraud 88-89
Identifying Risks That May Result in a Material Misstatement Due to Fraud 90-94
Assessing the Identified Risks After Taking an Evaluation of the Entity s Programs and Controls That Address the Risks Into Account 95-96
Responding to the Results of the Assessment 97
Evaluating Audit Evidence 98
Responding to Misstatements That May Be the Result of Fraud 99-100
Communicating About Possible Fraud to Management, Those Charged With Governance, and Others 101-102
Documentation and Guidance 103
Use of Information Technology 104-107
Going Concern Considerations 108-116
Evaluating Misstatements 117-120
Audit Documentation 121-129
Consideration of the Work of Internal Auditors 128-129
Communication of Matters Related to Internal Control 130-137
Identification of Deficiencies in Internal Control 131-132
Communication of Deficiencies in Internal Control 133-137
Communication of Other Matters With Those Charged
With Governance 138-142
Matters to Be Communicated 140-142
Communications by Successor Auditors 143
Auditor Independence 144-145
Auditing Fair Value Measurements and Disclosures 146-148
Considerations for Auditors to Comply With the NAIC Model Audit Rule 149-170
Awareness 150-151
Change in Auditor 152
Auditor s Letter of Qualifications 153
Qualifications of the Auditor 154
Indemnification 155
Partner Rotation 156
Prohibited Services 157-159
Consideration of Internal Controls in a Financial Statement Audit 160
Notification of Adverse Financial Condition 161-162
Report on Internal Controls 163-165
Working Papers 166
Communications to Audit Committees 167
Management s Report on Internal Controls Over Financial Reporting 168-170
Auditor s Consideration of State Regulatory Examinations 171-175
Auditor s Consideration of Permitted Statutory Accounting Practices 176-180
SEC Requirements for Management s Report on Internal Control Over Financial Reporting 181-186
3 Premiums 01-132
Background 01-29
Types of Premiums Adjustments 04
Summary of Premium Transaction Flow 05-26
Involuntary Markets 27-29
Accounting for Premiums and Acquisition Cost 30-110
Premium Revenue and Premium Adjustments 30-49
Premium Receivable 50-55
Acquisition Costs 56-83
Premium Deficiencies 84-97
Medicare Part D 98-102
Accounting for Contracts That Do Not Transfer Insurance Risk 103-104
Disclosure Considerations 105-110
Auditing Premiums and Acquisition Costs 111-132
Audit Planning 111
Consideration of Fraud in a Financial Statement Audit 112
Audit Risk Factors Premiums and DAC 113-116
Management Estimates 117-119
Risk of Material Misstatement Inherent Risk Factors 120-121
Internal Control 122-124
Control Environment 125-126
Risk Assessment Process 127-128
Control Activities 129
Audit Procedures Responsive to the Assessed Risks of Material Misstatement 130-131
Audit Consideration Chart 132
4 The Loss Reserving and Claims Cycle 01-205
Introduction 01-02
Types of Businesses and Their Effect on the Estimation Process 03-14
Policy Duration 04
Type of Coverage 05
Kind of Insurance Underwritten: Line of Business or Type of Risk 06-14
The Transaction Cycle 15-32
Claim Acceptance and Processing 16-18
Claim Adjustment and Estimation 19-24
Claim Settlement 25-28
Reinsurance Receivable 29-30
Salvage and Subrogation 31-32
Components of Loss Reserves 33
Estimating Methods 34-53
Illustrative Projection Data 44-53
LAE Reserves 54-62
DCC Reserve Calculation Approaches 56-59
AO Reserve Calculation Approaches 60-62
Changes in the Environment 63-66
Critical Accounting Policies and Estimates Disclosure 67-68
Use of Specialists by Management in Determining Loss Reserves 69-71
Guaranty Fund and Other Assessments 72
Accounting Principles 73-93
Discounting Loss Reserves 75-82
Structured Settlements 83-85
Reinsurance Receivables 86
SAP 87-93
Disclosures of Certain Matters in the Financial Statements of Insurance Enterprises 94-113
Applicability to Statutory Financial Statements 94
Relationship to Other Pronouncements 95
Liability for Unpaid Claims and Claim Adjustment Expenses 96-113
Auditing Loss Reserves 114-205
Planning Considerations Overview 114-119
Consideration of Fraud in a Financial Statement Audit 120-122
Risk of Material Misstatement Inherent Risk Factors 123
Internal Control 124-126
Control Environment 127
The Entity s Risk Assessment Process 128-129
Information Systems 130
Control Activities 131-132
Identifying and Assessing the Risks of Material Misstatement 133
Audit Procedures Responsive to the Assessed Risks of Material Misstatement 134-142
Use of Loss Reserve Specialists 143
Loss Reserve Specialists Engaged by the Auditor 144-146
Use of Management Specialists by Auditors in Evaluating Loss Reserves 147-149
Auditor s Response to Management s Use or Non-Use of a Loss Reserve Specialist 150
Evaluating the Reasonableness of the Estimates 151
Analytical Procedures 152-157
Testing the Data, Assumptions, and Selection of the Estimate 158-162
Auditing the Underlying Data Used in the Loss Reserving Process 163-168
Develop a Point Estimate or Range to Evaluate Management s Estimate 169-170
Loss Reserve Ranges 171-177
Factors That Could Affect a Range of Reasonably Possible Outcomes 178-184
Evaluating the Financial Effect of a Reserve Range 185-193
Auditor Uncertainty About the Reasonableness of Management s Estimate and Reporting Implications 194-195
Evaluating the Reasonableness of Loss Adjustment Expense Reserves 196-197
Ceded Reinsurance Recoverable and Receivable 198-203
Understanding the Impacts of Foreign Exchange 204
Audit Consideration Chart 205
5 Investments and Fair Value Considerations 01-246
Introduction 01-08
Overview 01
Investment Evaluation 02-03
Recordkeeping and Key Performance Indicators 04-05
The Transaction Cycle 06-07
Safekeeping 08
Regulation 09-14
Statutory Limitations 10-14
FASB Accounting Standards Codification 820 and 825 15-40
Definition of Fair Value 16-22
Application to Liabilities and Instruments Classified in a Reporting Entity s Shareholders Equity 23-25
The Fair Value Hierarchy 26-30
Fair Value Determination When the Volume or Level of Activity Has Significantly Decreased 31-33
Disclosures 34-35
Fair Value Option 36-38
Statutory Accounting 39-40
Accounting Practices 41-219
Significant Differences Between GAAP and Statutory Accounting 42
Cash and Cash Equivalents 43-49
Debt and Equity Securities 50-96
Mortgage Loans 97-111
Troubled Debt Restructurings 112-120
Real Estate 121-131
Derivatives, Including Futures, Options, and Similar Financial Instruments 132-146
Joint Ventures and Partnerships 147-161
Investments in SCA Entities 162-177
Investment Income Due and Accrued 178-182
Asset Transfers and Extinguishments of Liabilities 183-197
Repurchase Agreements 198-210
Securities Lending 211-218
Other Information 219
Auditing Investments 220-246
Audit Planning 220
Consideration of Fraud in a Financial Statement Audit 221
Audit Risk Factors Investments 222-225
Risk of Material Misstatement Inherent Risk 226-228
Internal Control 229-231
Control Environment 232
Risk Assessment Process 233-234
Information System 235-236
Control Activities 237
Service Organizations 238-241
Audit Procedures Responsive to the Assessed Risks of Material Misstatement 242-243
Group Audit Considerations for Investments in Alternative Investments and Subsidiary, Controlled
and Affiliated Entities 244
Audit Consideration Chart and Procedures 245-246
6 Reinsurance 01-119
Types of Reinsurance 07-08
Reinsurance Contracts 09-19
Bases of Reinsurance Transactions 15-18
Frequently Used Terms in Reinsurance Contracts 19
Accounting Practices 20-81
Generally Accepted Accounting Principles Accounting Practices 20-75
Statutory Accounting Principles 76-81
Special Risk Considerations 82-86
Auditing Reinsurance 87-119
Audit Planning 87
Consideration of Fraud in a Financial Statement Audit 88
Audit Risk Factors Reinsurance 89-91
Risk of Material Misstatement Inherent Risk 92
Internal Control 93-94
Control Environment 95
Risk Assessment Process 96-97
Information and Communication 98-99
Control Activities 100
Audit Procedures Responsive to the Assessed Risks of Material Misstatement 101-102
Internal Control of the Ceding Entity 103-104
Internal Control of the Reinsurer 105-106
Auditing Procedures for the Ceding Entity 107-109
Auditing Procedures for the Assuming Entity 110-113
Pools, Associations, and Syndicates 114
Reinsurance Intermediaries 115-118
Audit Consideration Chart 119
7 Income Taxes 01-78
Introduction 01-02
Federal Income Taxation 03-20
Statutory Accounting Practices and Taxable Income 05-07
Special Income Tax Provisions 08-20
State Taxation 21-22
GAAP Accounting for Income Taxes 23-56
Basic Principles of GAAP Accounting for Income Taxes 25-46
Disclosure Requirements Contained in GAAP Literature 47-56
Statutory Accounting for Income Taxes 57-62
Disclosure Requirements Contained in Statutory Literature 62
Changes in Tax Law 63
Auditing Income Taxes 64-78
Audit Planning 64
Consideration of Fraud in a Financial Statement Audit 65
Audit Risk Factors Income Taxes 66-68
Risk of Material Misstatement Inherent Risk 69
Internal Control 70-71
Control Environment 72
Risk Assessment Process 73-74
Control Activities 75
Audit Procedures Responsive to the Assessed Risks of Material Misstatement 76-77
Audit Consideration Chart 78
8 Insurance-Related Expenses, Taxes, and Assessments 01-91
Introduction 01-05
Premium and State Taxes 06-12
Guaranty Fund and Other Assessments 13-65
Generally Accepted Accounting Principles 19-22
Statutory Accounting Principles 23-30
The Patient Protection and Affordable Care Act 31-65
Capitalized Costs and Certain Nonadmitted Assets 66-70
Pensions 71-73
Audit Considerations 74-91
Audit Planning 74
Consideration of Fraud in a Financial Statement Audit 75
Audit Risk Factors 76-78
Internal Control 79-81
Audit Procedures Responsive to the Assessed Risks of Material Misstatement 82-91
9 Captive Insurance Entities 01-43
Introduction 01-06
Types of Captive Organizations 07-26
Captive Operations 27-29
Specific Transaction Considerations and Accounting Principles 30-35
Taxes 33-35
Audit Considerations 36-43
Audit Planning 36
Consideration of Fraud in a Financial Statement Audit 37
Audit Risk Factors 38-40
Internal Control 41-42
Audit Procedures Responsive to the Assessed Risks of Material Misstatement 43
10 Reports on Audited Financial Statements 01-85
Reports on Financial Statements 01-02
Unmodified Opinions on GAAP Financial Statements 03-05
Modified Opinions 06-28
Qualified Opinion 10-11
Disclaimer of Opinion 12-14
Adverse Opinion 15-17
Emphasis-of-Matter Paragraphs 18-27
Evaluating Consistency of Financial Statements 28
Additional Guidance When Performing Integrated Audits of Financial Statements and Internal Control Over
Financial Reporting 29-32
Considerations for Audits Performed in Accordance With PCAOB Standards 29-31
Reporting on Whether a Previously Reported Material Weakness Continues to Exist 32
Auditors Reports on Statutory Financial Statements of Insurance Entities 33-54
NAIC Codified Statutory Accounting 34-36
Regulatory Basis Financial Statements Intended for General Use 37-42
Regulatory Basis Financial Statements Intended for Limited Use 43-48
Regulatory Basis Financial Statements Other Issues 49-54
Correction of Error 55-60
Correction of an Error Regulatory Basis Financial Statements Intended for General Use 59
Correction of an Error Regulatory Basis Financial Statements Intended for Limited Use 60
Opinion on Supplemental Schedules 61-67
Other Reports 68-85
Accountant s Awareness Letter 69-71
Change in Auditor Letter 72-75
Notification of Adverse Financial Condition Letter 76-79
Auditor Reports for Communicating Unremediated Material Weaknesses in Internal Control to
Insurance Regulators 80-83
Accountant s Letter of Qualifications 84-85
Appendix
A Accounting for Financial Instruments
B The New Leases Standard: FASB ASU No. 2016-02
C Overview of Statements on Quality Control Standards
D The New Revenue Recognition Standard: FASB ASU No. 2014-09
E Property and Liability Insurance Entity Specific Disclosures
F Examples of Development Data
G List of Industry Trade and Professional Associations, Publications, and Information Resources
H Schedule of Changes Made to the Text From the Previous Edition
Glossary
Index of Pronouncements and Other Technical Guidance
Subject Index
| Erscheinungsdatum | 02.03.2017 |
|---|---|
| Reihe/Serie | AICPA Audit and Accounting Guide |
| Verlagsort | NC |
| Sprache | englisch |
| Maße | 163 x 227 mm |
| Gewicht | 760 g |
| Themenwelt | Wirtschaft ► Betriebswirtschaft / Management ► Rechnungswesen / Bilanzen |
| ISBN-10 | 1-943546-84-3 / 1943546843 |
| ISBN-13 | 978-1-943546-84-8 / 9781943546848 |
| Zustand | Neuware |
| Informationen gemäß Produktsicherheitsverordnung (GPSR) | |
| Haben Sie eine Frage zum Produkt? |
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