Page 286 - DCOM204_AUDITING_THEORY

Auditing Theory

Notes Insurance Regulatory & Development Authority, a body constituted under the Ministry of
Finance to deal with licensing, regulating and monitoring all activities relating to the insurers,
brokers, agents, corporate agents and the TPA’s.
13.6 Review Questions

1. Write short note on “Unexpired Risks Reserve”.
2. State the procedure for verification of Agents’ Balances in the course of Audit of GIC.
3. Write short notes on (i) Co-insurance; (ii) Re-insurance; (iii) Management Expenses of
Insurance Companies; (iv) Valuation of Investments in GIC and (v) Solvency Margin.
4. What observations an auditor of a GIC is required to make in compliance of CAG directions
u/s 619(3) of the Companies Act, in respect of (i) System of financial control; and (ii)
Investments?
5. Part IV of Schedule B of IRDA (Preparation of Financial Statements and Auditor’s Report
of Insurance Companies) Regulations, 2000, requires a Management Report to be attached
to the financial statements. What are the contents of such management report?

6. “In an audit of an insurance company, the Receipts and Payments Account is also subjected
to audit”. Comment on this statement in brief.

Answers: Self Assessment

1. 1956
2. Liabilities and fund

3. 1 lac crore
4. KCS Act and Rules
5. State Government

6. Joint Stock Company; Co-operative Society
7. IRAC Norms
8. Member
9. IRDA
10. Incurred Claims

11. URR

13.7 Further Readings

Books David Coderre, Internal Audit: Efficiency Through Automation, John Wiley & Sons,
2009.

Emile Woolf, Moira Hindson, Audit and Accountancy Pitfalls: A Casebook for Practising
Accountants, Lawyers and Insurers, John Wiley & Sons, 2011.
Iain Gray, Stuart Manson, The Audit Process: Principles, Practice and Cases, Cengage
Learning EMEA, 2007.

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