INFORMATION REQUIRED BY THE REGISTRAR OF LONG-TERM OR SHORT-TERM INSURANCE IN CONSIDERING THE APPROVAL OF THE APPOINTMENT OF AN AUDITOR OF A LONG-TERM OR SHORT-TERM INSURER
INFORMATION REQUIRED BY THE REGISTRAR OF LONG-TERM OR SHORT-TERM INSURANCE IN CONSIDERING THE APPROVAL OF THE APPOINTMENT OF AN AUDITOR OF A LONG-TERM OR SHORT-TERM INSURER IN TERMS OF SECTION 19(2) OF THE LONG-TERM INSURANCE ACT OR THE SHORT-TERM INSURANCE ACT (“ACT”)
A.Instructions for completion and submission
1.This form must be properly completed and signed. Questions must be answered either in full or not applicable (“n/a”). Depending on the complexity and size of the audit of the relevant insurer, certain questions may not be appropriate. Where this is the case, the fact and reason for the question not being applicable should be stated. The signer(s) must be duly authorised to furnish the information.
2.The format of this form or the wording of questions may not be changed. However, this form may be reproduced.
3.Answers may be in writing or may be typed.
3.1If the form is completed on a computer, -
(a)delete the solid lines in those areas provided for answers before the typed or use the overtype mode whilst the answers are typed.
(b)rows may be inserted where insufficient space is provided for answers.
3.2If the form is completed by hand, should the space provided not be sufficient, the detail can be provided on a separate page, duly cross-referenced to the relevant question.
3.3If the form that is submitted contains any changes to typed or written information, those changes must be signed.
4.The completed form does not need to be accompanied by any number of copies.
5.Part D of this form deals with information on the audit firm. This part must be completed once only.
6.Part E of this form deals with information on the responsible partner. This part must be completed for every insurer for which application for the appointment of a responsible partner is made.
7.When firms are appointed for the first time, both Parts D and E must be completed.
8.The responsible partner should complete the form and certify the contents as set out in the declaration on the last page of this form.
B.General information
1.This form is required in terms of section 3(2)(b)(ii) of the Act read with section 19(2) of the Act.
2.The Registrar, in terms of section 4(2) of the Act, may by notice direct a long-term or short-term insurer (“insurer”) to furnish the Registrar, within a specified period, with specified additional information or documents.
3.Terms used in this document will have the same meaning as defined in the Act.
4.The information in this document is confidential and not available for inspection by the public.
C.Legal and policy framework
1.In terms of section 19(2) of the Act an insurer must apply for approval for the appointment of an auditor.
2.In terms of section 19(1) of the Act an insurer may appoint more than one auditor.
3.In terms of section 19(3) of the Act an insurer shall not appoint as its auditor -
(a)one of its directors; or
(b)a person who is not engaged in public practice as an auditor.
4.In terms of section 22(1) of the Long-term insurance Act or section 21(1) of the Short-term insurance Act the Registrar may by notice require an insurer to terminate the appointment of an auditor of that insurer, if the person or firm concerned is not fit and proper to hold the office concerned.
5.“Responsible partner” means the auditor responsible for the effective functioning of all the phases in the audit and for exercising his/her professional judgment, based on the results of the audit procedure, to express an opinion on the fair presentation of the financial statements of the insurer.
6.Whilst the questions cover various criteria for qualifying or disqualifying audit firms for audit engagements of insurers, the criteria and replies thereto should not be regarded as an automatic qualification or disqualification or as exhaustive. The criteria have been made as objective as possible, but, naturally, a degree of subjectivity is still present in come criteria, and not all applicable criteria could be foreseen by the Registrar.
7.The responsible partner should be specifically nominated by the firm being appointed, as the responsible partner on the audit of the insurer.
D.Information on audit firm
(This part must be completed once only.)
IGeneral objective : Administrative and firm profile information
1.State the name of the firm.
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2.Furnish the business address (postal and physical), telephone and facsimile numbers.
2.1Postal.
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2.2Physical.
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2.3Telephone number.
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2.4Facsimile number.
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3.State the full forename(s) and surname of the responsible partner (including any former names).
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4.Indicate the number of partners in the firm, number of partners in the office responsible for the assignment and names of key partners involved in the assignment.
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5.Indicate the number of professional assistants in the firm and in the office responsible for the assignment.
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6.Indicate the number of trainee accountants in your firm and in the office responsible for the assignment.
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7.Furnish details of significant insurers audited/to be audited.
NameRef NoNo of years engaged on audit
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8.Furnish details of institutions similar to insurers audited.
NameRef NoNo of years engaged on audit
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IIGeneral objective : Independence of the firm
9.Do you believe that the firm is organisationally independent from the insurer, or the group of which it is part, and able to maintain an objective frame of mind in accomplishing its audit responsibilities? (Please provide details).
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9.1What percentage1 of the firm’s total gross fees per annum is received (or will be received) directly or indirectly from the insurer, or the group of which it is part?
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1.The Registrar has indicated that, as a rule of thumb, 10 per cent of more of the total gross fees could be regarded as a large portion. Should the percentage indicated above exceed 10 per cent, please provide a motivation as to why you regard it as not impairing the firm’s independence, using a separate page if necessary.
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IIIGeneral objective : Professional proficiency of the firm
10.Are you of the opinion that sufficient and relevant knowledge, skills and disciplines are available in the firm for the engagement? (Please provide details).
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11.Is the responsible partner qualified to act as auditor under the Public Accountants’ and Auditors’ Act?
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12.What relevant qualifications, if any, in the long-term or short-term insurance industry, as the case may be, do the responsible partner and the key staff to be involved in the engagement possess?
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13.Do the responsible partner and the firm have access to a technical department capable of researching new developments in auditing and accounting standards in the long-term or short-term insurance industry, as the case may be? (Please provide details).
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14.Does the firm have international links with auditors of similar institutions in other countries, in order to share information and expertise and to facilitate the audit of any cross-border activities of the insurer? (Please provide details).
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15.Does the firm have access to adequately specialised training for auditors in the long-term or short-term insurance industry, as the case may be? (Please provide details).
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16.Does the firm have access to a library with up-to-date sources of all relevant statements, standards, legislation, regulations, literature, trends and developments within the long-term or short-term insurance industry, as the case may be? (Please provide details).
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17.Does the firm possess or have access to a specialised unit capable of auditing and assessing the adequacy and effectiveness of computerised systems? (Please provide details).
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18.Does the firm have an audit approach, techniques and procedures designed to obtain reasonable assurance that misstatements arising from fraud and error that are material to the financial statements as a whole are detected? (Please provide details).
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19.Does the firm ensure that its audit approach is kept up to date with regard to developments in the profession and within the long-term or short-term insurance industry, as the case may be? (Please provide details).
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20.Does the firm have a competent quality-assurance process that ensures that there is a compliance with the firm’s internal standards and any externally imposed standards? (Please provide details).
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21.Does the responsible partner have firm and feasible plans to staff the engagement such that its effectiveness can be maintained from year to year, and is continuity of staff part of the policy of the firm? (Please provide details).
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IVGeneral objective : Disqualification of the firm
22.Is the responsible partner qualified to act as auditor, specifically relating to the disqualification criteria stated in section 275 of the Companies Act, 1973?
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23.Are there any pending or current lawsuits or professional liability suits against partners of the firm that the Registrar should be aware of? (Please provide details).
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24.Has the firm previously been engaged by a regulatory authority to perform a special investigation on its behalf that failed to reveal a problem that was subsequently shown to exist? (Please provide details).
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25.Does the firm have the knowledge to comply with all the special duties imposed by legislation on the auditor of an insurer? (Please provide details).
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26.Are there any other information or documents that are relevant to Part D of this form?
Yes2No
2.If the answer is “Yes” kindly specify the information or documents.
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E.Information on responsible partner
(This part must be completed for every insurer for which application for the appointment of a responsible partner is made and must be completed by the responsible partner)
IGeneral objective : Responsible partner information, qualifications and experience
1.State the name of the society (of The South African Institute of Chartered Accountants (SAICA)) to which you belong.
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2.Furnish your membership/reference number with SAICA and with the Public Accountants’ and Auditors’ Board (‘PAAB’).
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3.List your professional qualifications and the year(s) in which they were obtained. Provide a copy of the curriculum vitae unless it has already been provided.
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4.Specify your occupation and employment during the past 10 years. While in auditing, indicate types of client, in particular how many in the long-term or short-term insurance industry, as the case may be.
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5.Has your registration as a chartered accountant ever been suspended or have you ever been cautioned, reprimanded or fined by the PAAB? (Please provide details).
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6.Furnish details of attendance of SAICA’s workshops relating to the long-term or short-term insurance industry, as the case may be?
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7.Are you on SAICA’s mailing list for receiving documentation of the long-term or short-term insurance industry, as the case may be?
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8.Do you have a copy of the relevant Act, regulations, board notices and Registrar’s directives and circulars that are in force within the long-term or short-term insurance industry, as the case may be, and are you aware of the contents thereof?
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IIGeneral objective : Independence of the responsible partner
9.Do you believe that you are independent from the insurer, or the group of which it is part, and able to maintain an objective frame of mind in accomplishing your audit responsibilities? (Please Provide details).
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9.1Do you believe that in your provision of other consulting services, if any, to the insurer you will always be able to maintain an independent frame of mind in forming an opinion regarding the institution? (Please provide details).
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9.2Are you or the firm involved in the management or decision making of the insurer, or are you or the firm associated with a service provider of the insurer? If yes, kindly provide a list of other than audit services provided to the insurer, an indication of the extent of such services, as well as whether such services are carried out independently of the responsible partner.
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(Actions such as being engaged in the preparation of the financial statements and statutory returns, involvement in the valuation of assets or liabilities for purpose of recording them in the financial statements, acting for the insurer in the resolution of litigation that may have a material impact on the financial statements, the design of computer systems, the rendering of internal audit services, or performance of services having a direct impact upon senior managements, such as their recruitment, which could indicate involvement in the management of the insurer).
9.3Do you, as responsible partner, have (or intend having) a direct line of communication and a working relationship with the board of directors/trustees or audit committee where required by the insurer?
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9.4Is there anything known to you that will prevent the audit relationship from continuing to exist? (Please provide details).
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IIIGeneral objective : Professional proficiency of the responsible partner
10.What relevant qualifications, if any, in the long-term or short-term insurance industry, as the case may be, do you possess? (If not covered in question 12 of Part D or question 3 of Part E).
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11.Do you, in your capacity of responsible partner, have access to the following resources:
11.1Technical department, as contemplated in question 13 of Part D?
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11.2International links with the auditors of similar institutions, as contemplated in question 14 of Part D?
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11.3A library, as contemplated in question 16 of Part D?
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11.4A specialised unit, as contemplated in question 17 of Part D?
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12.Are you, as responsible partner of the engagement, subject to external practice reviews?
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13.Are you or will you be able to show how all problems addressed in the most recent practice reviews report have been subsequently resolved?
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14.Are you, as responsible partner of the engagement, subject to internal peer review from time to time by your partners with appropriate industry experience? (Please provide details).
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IVGeneral objective : Disqualification of the responsible partner
15.Are you qualified to act as auditor specifically keeping in mind the disqualification criteria covered in section 275 of the Companies Act, 1973?
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16.Are there any pending or current lawsuits or professional liability suits pending against you that the Registrar should be aware of? (Please provide details).
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17.Have you ever been a responsible partner engaged by a regulatory authority to perform a special investigation on its behalf that failed to reveal a problem that was subsequently shown to exist? (Please provide details).
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18.Have you ever been removed as responsible partner of a regulated institution by a regulatory authority? (Please provide details).
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19.Are there any other information or documents that are relevant to Part E of this form?
Yes3No
3.If the answer is “Yes” kindly specify the information or documents.
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20.I hereby enclose –
20.1the curriculum vitae in question 3 of Part E.
20.2the signed declaration.
20.3the other documents, if any, mentioned in Parts D and E in support of the information in this form.
Date of design of document: 01/08/2003Page 1
INFORMATION REQUIRED BY THE REGISTRAR OF LONG-TERM OR SHORT-TERM INSURANCE IN CONSIDERING THE APPROVAL OF THE APPOINTMENT OF AN AUDITOR OF A LONG-TERM OR SHORT-TERM INSURER
DECLARATION
I, the undersigned, the responsible partner of ______(insert name of firm or partnership), certify that, to the best of my knowledge, the information given in answer to the above questions in Part D and Part E (indicate as applicable) is complete and accurate and not untrue or misleading in any respect.
I undertake, as long as I continue to be the partner responsible for the audit of the insurer, to notify the Registrar of any material changes to the answers to the questions above, inclusive of any disciplinary action instituted against me by not later than 21 days as from the day that such changes come to my attention.
Full forename(s) and surname.
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SIGNATUREDATE
Date of design of document: 01/08/2003Page 1