CIA.MAT Flashcards

1
Q

define materiality

A

an omission / under-statement / over-statement is MATERIAL..
..if the actuary expects it to MATERIALLY AFFECT the user’s decision-making or reasonable expectations

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2
Q

identify characteristics of an insurance company that may affect materiality (6)

A

Financial strength (SOP 1340.04)

Size (of entity)
Type of business
Access (to capital)
net Retention
Stage (of organization’s life cycle)

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3
Q

identify a metric to test materiality for regulatory (or solvency) purposes (2)

A
  • statutory surplus
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4
Q

identify a metric to test materiality for appraisals (3)

A
  • net worth
  • net income
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5
Q

identify a metric to test materiality for general purpose financial statements (2)

A
  • statutory surplus
  • net income
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6
Q

considerations for extent of disclosure of materiality (3)

A
  • sophistication of user
  • important of concept to user
  • complexity of concept
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