The statutory audit process of an insurance principal
type: CreativeWork
description: PURPOSE: The research sought to analyse the audit procedures which are specific to a specialised insurance audit. It further analysed the shortcomings and weaknesses which are currently prevalent in an insurance audit, from the perception of the auditor. DESIGN: A mono-method qualitative semi-structured interview was designed with the aid of a practitioner working in the industry, to achieve the objectives of the study. The interview was conducted with five local Insurance Audit Specialists who are employed by Big 4 and mid-tier audit firms. FINDINGS: The study revealed that the main differentiating features of an insurance audit stem from the fact that the insurance business constitutes a PIE, and thus has to abide by all rules relevant to PIEs. Despite the small magnitude of laws specifically regulating the insurance business, the existing rules, most notably, Solvency 2, imposes very strict rules on the insurance undertaking. As a result, these rules indirectly affect the insurance audit process. Other differentiating audit features relate to the involvement of actuaries, the audit of the SCR, insurance premiums and technical provisions. The main weaknesses related to the disproportionate regulation between insurance accounting and insurance audit, the necessity of joint audit opinions for specific audits and lastly, the requirement of more guidance by ISAs for the audit of specialised businesses, such as insurance. CONCLUSION: None of these features apply in a non-insurance audit and thus, this highlights the necessity that the insurance auditor is sufficiently and properly trained to act as such. VALUE: The findings enables several recommendations to be suggested to further enhance the quality of an insurance statutory audit.
abstract: PURPOSE: The research sought to analyse the audit procedures which are specific to a specialised insurance audit. It further analysed the shortcomings and weaknesses which are currently prevalent in an insurance audit, from the perception of the auditor. DESIGN: A mono-method qualitative semi-structured interview was designed with the aid of a practitioner working in the industry, to achieve the objectives of the study. The interview was conducted with five local Insurance Audit Specialists who are employed by Big 4 and mid-tier audit firms. FINDINGS: The study revealed that the main differentiating features of an insurance audit stem from the fact that the insurance business constitutes a PIE, and thus has to abide by all rules relevant to PIEs. Despite the small magnitude of laws specifically regulating the insurance business, the existing rules, most notably, Solvency 2, imposes very strict rules on the insurance undertaking. As a result, these rules indirectly affect the insurance audit process. Other differentiating audit features relate to the involvement of actuaries, the audit of the SCR, insurance premiums and technical provisions. The main weaknesses related to the disproportionate regulation between insurance accounting and insurance audit, the necessity of joint audit opinions for specific audits and lastly, the requirement of more guidance by ISAs for the audit of specialised businesses, such as insurance. CONCLUSION: None of these features apply in a non-insurance audit and thus, this highlights the necessity that the insurance auditor is sufficiently and properly trained to act as such. VALUE: The findings enables several recommendations to be suggested to further enhance the quality of an insurance statutory audit.
language: en
keywords: Corporations -- Auditing -- Law and legislation -- Malta., Insurance law -- European Union countries
date published: 2019
date modified: 2026-07-27T20:12:06Z
provider: University of Malta
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: University of Malta