C - CIA Subsequent Events Flashcards
CIA SUBSEQUENT EVENTS
Define
subsequent event
event the actuary FIRST BECOME AWARE after the calculation date, but before the report date
CIA SUBSEQUENT EVENTS
Contrast
calculation date
vs
the report date
–Calculation date–
balance sheet date
–Report date–
date on which the actuary completes the report on his work and communicates USERS about his work.
CIA SUBSEQUENT EVENTS
The actuary should take a subsequent event into account if the subsequent event (3) :
1) provides information about the entity as it was at the calculation date
OR
2) retroactively make the entity different at the calculation date
OR
3) makes the entity different after the calculation date and a purpose of the work is to report on the entity as it will be as a result of the event.
CIA SUBSEQUENT EVENTS
Contrast
Adjusting Events
and
Non Adjusting Events
ADJUSTING EVENTS
conditions that existed at the calculation date
NON-ADJUSTING EVENTS
conditions that arose after the calculation date
CIA SUBSEQUENT EVENTS
In general, what would accounting standards require :
for adjusting events?
for non-adjusting events?
ADJUSTING EVENTS
if material, reflect event in the work
NON-ADJUSTING EVENTS
if material, disclose in the notes to the financial statement about
1) nature of the event
2) estimate of financial effect of the event.
CIA SUBSEQUENT EVENTS
What should actuary do if subsequent event is from a material data defect or calculation error
Reflect in work
Communicate it to management and auditor
CIA SUBSEQUENT EVENTS
2 items that should be disclosed in the notes to the financial statements after a subsequent event
1) Nature of the event
2) Estimate of financial effect (or statement that such an estimate cannot be calculated)
- – discussion about impact of the event on future results of company.
CIA SUBSEQUENT EVENTS
Compare
level of actuarial materiality
vs
auditor materiality
actuary materiality level to be lower than audit materiality level
