CIA.CSOP

Question 1

briefly describe when an actuarial approximation is appropriate

Answer 1

if it does any of the following without affecting the result:
reduces cost
reduces time
improves control

Question 2

identify examples of quality assurance processes

Answer 2

• check calculations
• validate models
• redo the work (Ugh!!!)
• peer review

Question 3

identify considerations in determining what quality assurance processes to perform

Answer 3

• purpose, complexity, significance of work
• vulnerability to error
• expectations of user
• legislative requirements (for peer review)

Question 4

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

Answer 4

• qualifications of the other person
  (ACAS or FCAS is good)
• regular communication & info-sharing with the other person
  (morning chats are good)
• awareness by the other person of how the work is being used

Question 5

identify the purpose of CIA/CICA Joint Policy Statement (3)

Answer 5

JPS discusses:
- 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 ‘RelSuff’ of data
  (reliability & sufficiency of data)
• actuary IS NOT responsible for data integrity or controls
  (may enquire of auditor regarding these items)

Question 10

identify auditor’s responsibility under JPS regarding financial statements

Answer 10

• auditor IS responsible for integrity of financial statements
  (financial position, operations, cash flows)
• auditor IS NOT responsible for the actuarial valuation
  (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 & briefly describe 4 types of actuarial reports according to CSOP 1700

Answer 13

external report
- formal & detailed
- range of appropriate reports is narrow (narrower than for internal reports)
internal report
- may be formal & detailed OR informal & abbreviated depending on use & user
- range of appropriate reports is wide (wider than for external reports)
oral report
- useful to an internal user
- disadvantage (versus internal report) is no written record
summary report
- a simplified way to communicate actuary’s analysis
- may be part of an external or internal 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 (I hope so!)
• assumptions (and justification)
• methods (descriptions of)
• reservations or qualifications (if any)
  (and many others, most of which are common sense)

Question 15

identify the scope of CSOP 2600 regarding derivation & recommendation of rates

Answer 15

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