CIA.CSOP

Question 1

describe when an actuarial approximation is ‘appropriate’

Answer 1

an approximation is appropriate if it does any of these without affecting the result
- reduces cost & time
- improves control
-> approximation should strike a balance between benefit and effort

Question 2

identify 4 examples of quality assurance processes

Answer 2

CRedit to PV for assure the quality of my work
- Check calculations
- Redo the work
- Peer review
- Validate models

Question 3

identify considerations in determining what quality assurance processes to perform

Answer 3

consideration is the PV -> LE PV
- legislative requirements of peer review
- expectations of user
- purpose, complexity and significant of work
- vulnerability to error

Question 4

identify items an actuary should consider before using another person’s work

Answer 4

Ah consider scanning the QR code first (AQR)
- awareness by the other person pf how the work is being used
- qualifications of the other person (ACAS or FCAS is good)
- regular communication & info sharing with the other person

Question 5

identify the purpose of CIA/CCIA Joint Policy Statement

Answer 5

discusses RID
- Reliance of auditor & actuary on each other’s work
- Interaction between auditor & actuary
- Disclosure of responsibilities of auditor & actuary

Question 6

define “enquiring professional”

Answer 6

a professional who relies on the work of another (responding professional) in the course of their own work

Question 7

define “responding professional”

Answer 7

a professional whose work is being used by another (enquiring professional)

Question 8

identify management’s responsibility under JPS regarding financial statements

Answer 8

management has overall responsibility for F/S (may include amounts determined by actuary)

Question 9

identify actuary’s responsibility under JPS regarding financial statements

Answer 9

• actuary is responsible for reliability and sufficiency of data
• actuary is not responsible for data integrity or controls

Question 10

identify auditor’s responsibility under JPS regarding financial statements

Answer 10

• auditor is responsible for integrity of financial statements
• auditor is not responsible for the actuarial valuation, but may enquire of actuary regarding valuation

Question 11

identify communication requirements for enquiring professional with responding professional

Answer 11

• notify responder that work is being used
• notify responder regarding needs (materiality, subsequent events, timing)
• request confirmation of responder’s appointment, professional standing, observance to standards

Question 12

identify communication requirements for responding professional with enquiring professional

Answer 12

• confirm that work will be done
• confirm appointment, professional standing, observance of standards
• notify of any issues in meeting enquiring professional’s needs

Question 13

identify and describe 4 types of actuarial reports according to CSOP 1700

Answer 13

• external report
• internal report
• oral report
• summary report

Question 14

identify items included in an external report according to CSOP 1700

Answer 14

• name of client
• description of work, use, user
• statement that it may not be appropriate for other uses
• statement about whether accepted actuarial practice was used
• assumptions
• methods
• reservations or qualifications

Question 15

identify the scope of CSOP2600 regarding derivation and recommendation of rates

Answer 15

within scope: derivation of rates
not within scope: recommendation of rates