With this project, the AASB will revise the Joint Policy Statement (JPS) Concerning Communications between Actuaries Involved in the Preparation of Financial Statements and Auditors, found in the Appendix to CAS 500, Audit Evidence.
The JPS was first issued in 2007 and has not been updated since.
With recent changes to significant auditing and accounting standards impacting amounts determined using actuarial calculations, the AASB undertook research to understand the challenges faced by practitioners when communicating with actuaries on audited amounts determined using actuarial calculations.
The results of the research highlighted the following public interest issues:
- Audit quality is enhanced when auditors and actuaries have a clear understanding of how they will use each other’s work.
- Auditors have the appropriate guidance to apply these newly issued standards, in the context of an audit including amounts determined using actuarial calculations.
The AASB will address these public interest issues by seeking to clarify:
- whether the communications principles continue to be appropriate in the new practice environment, including the nature, timing and extent of communications required between the two professions; and
- the appropriate work effort under the auditing standards when the actuary requests information from the auditor to use in their calculations.