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
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)
3
Q
identify a metric to test materiality for regulatory (or solvency) purposes (2)
A
- statutory surplus
4
Q
identify a metric to test materiality for appraisals (3)
A
- net worth
- net income
5
Q
identify a metric to test materiality for general purpose financial statements (2)
A
- statutory surplus
- net income
6
Q
considerations for extent of disclosure of materiality (3)
A
- sophistication of user
- important of concept to user
- complexity of concept
