IAIS response to IAASB on ISA 720 (Revised)

11 March 2013

The IAIS published it comment letter addressed to the IAASB on the proposed revision of ISA 720. The IAIS is fully supportive of the objectives and the outlines of the proposed revision.

The IAIS has concerns in two areas:

• The definition of other information is not sufficiently clear, and is open to interpretation. The concept of other information should be better and more narrowly defined as well as more clearly illustrated in the guidance.
• The IAIS Insurance Core Principles require insurers to publicly disclose appropriately detailed quantitative and qualitative information about capital adequacy. An insurer should therefore disclose information that enables users to evaluate the insurer’s objectives, policies and processes for managing capital and to assess its capital adequacy. The IAIS strongly believes that other information that has the primary purpose of providing commentary on insurers’ capital adequacy should be included in the scope of the revised standard. Under the proposed guidance, the auditor would have the responsibility to read and consider the other information included in certain documents within the scope of the revised ISA ['The Auditor’s Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor’s Report Thereon']. In some cases, that may include documents that may not be available at the date of the auditor’s report, in which case the auditor is not required to update his report or to report publicly on his conclusions.

The IAIS believes that this absence of public disclosure is harmful and should be reconsidered.

Press release

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