Oliver Wyman Indexed Product Deep Dive Financial Reporting 2015 SOA Annual Me...Guillaume Briere-Giroux
This document discusses indexed annuity and indexed universal life financial reporting under US Statutory accounting, US GAAP, and surveys US GAAP practices. It outlines the valuation methods and implications of AG 35, AG 33, AG 43, VM-22, FAS 133, and SOP 03-1. For indexed universal life, most participants used simplified FAS 133 approaches due to complexity, and implementation varied. Key takeaways are that US Statutory and GAAP create economic mismatches, GAAP implementation has many nuances, certain product designs have fewer mismatches, and balancing economics, statutory, and GAAP requires strong analytics.
This document summarizes key considerations for pricing indexed annuities and variable annuity guaranteed lifetime withdrawal benefits (GLWB). It discusses the impact of the Department of Labor fiduciary rule, compares features of fixed indexed annuity (FIA) GLWBs to variable annuity (VA) GLWBs, and models projected returns of FIA and VA GLWB products under different asset strategies. A main point is that using risk-neutral valuation for FIA GLWBs fixed accounts would eliminate the credit risk premium, significantly impacting projected returns. Adding indexed crediting optionality may support making the FIA GLWB valuation risk-neutral. Overall, the "replication cost" of guarantees matters for pricing, and accounting/liqu
The document discusses the role of actuaries in life insurance mergers and acquisitions (M&A). It provides an overview of the North American M&A market and examples of recent deals. It then covers standards of practice, considerations for actuarial appraisals valuing insurance companies, and considerations for actuarial due diligence in M&A deals. The key takeaways are that actuaries should consider all applicable actuarial standards of practice for M&A work, clear communication and disclosure are important, and M&A presents an exciting professional challenge for actuaries.
Oliver Wyman Annuity Product Development Trends - 2014 SOA Annual Meeting Exh...Guillaume Briere-Giroux
This document discusses trends in the fixed indexed annuity (FIA) market and products. It notes that FIA sales have grown at a 10% annual rate from 2007-2014. It also discusses trends toward volatility-controlled indices, liquidity features in annuity products, and enhanced lifetime income and death benefits. Hybrid or structured annuities that have features of both FIAs and variable annuities are also discussed as a growing part of the annuity market.
The document discusses the impact of the Department of Labor's fiduciary rule on annuity product development and pricing. It covers three key areas: 1) An overview of the fiduciary rule, including timelines and impacted asset classes. 2) The impact on product design, such as standardization, reduced commissions and fees, and limitations on complex features. 3) The impact on product pricing, including lower lapse assumptions, expense implications, and the need for pricing refinements. The overall impact will be a repositioning of variable annuity and fixed index annuity products under the new regulations.
This document summarizes a panel discussion on risk, controls, and governance of models. The panel included three experts: Mrinal Raghupathi from USAA, Nicholas Benoit from American National Insurance Company, and Guillaume Briere-Giroux from Oliver Wyman. The panel aimed to discuss model risk in an interactive format and provide resources on related standards and guidance.
Oliver Wyman Indexed Product Deep Dive Financial Reporting 2015 SOA Annual Me...Guillaume Briere-Giroux
This document discusses indexed annuity and indexed universal life financial reporting under US Statutory accounting, US GAAP, and surveys US GAAP practices. It outlines the valuation methods and implications of AG 35, AG 33, AG 43, VM-22, FAS 133, and SOP 03-1. For indexed universal life, most participants used simplified FAS 133 approaches due to complexity, and implementation varied. Key takeaways are that US Statutory and GAAP create economic mismatches, GAAP implementation has many nuances, certain product designs have fewer mismatches, and balancing economics, statutory, and GAAP requires strong analytics.
This document summarizes key considerations for pricing indexed annuities and variable annuity guaranteed lifetime withdrawal benefits (GLWB). It discusses the impact of the Department of Labor fiduciary rule, compares features of fixed indexed annuity (FIA) GLWBs to variable annuity (VA) GLWBs, and models projected returns of FIA and VA GLWB products under different asset strategies. A main point is that using risk-neutral valuation for FIA GLWBs fixed accounts would eliminate the credit risk premium, significantly impacting projected returns. Adding indexed crediting optionality may support making the FIA GLWB valuation risk-neutral. Overall, the "replication cost" of guarantees matters for pricing, and accounting/liqu
The document discusses the role of actuaries in life insurance mergers and acquisitions (M&A). It provides an overview of the North American M&A market and examples of recent deals. It then covers standards of practice, considerations for actuarial appraisals valuing insurance companies, and considerations for actuarial due diligence in M&A deals. The key takeaways are that actuaries should consider all applicable actuarial standards of practice for M&A work, clear communication and disclosure are important, and M&A presents an exciting professional challenge for actuaries.
Oliver Wyman Annuity Product Development Trends - 2014 SOA Annual Meeting Exh...Guillaume Briere-Giroux
This document discusses trends in the fixed indexed annuity (FIA) market and products. It notes that FIA sales have grown at a 10% annual rate from 2007-2014. It also discusses trends toward volatility-controlled indices, liquidity features in annuity products, and enhanced lifetime income and death benefits. Hybrid or structured annuities that have features of both FIAs and variable annuities are also discussed as a growing part of the annuity market.
The document discusses the impact of the Department of Labor's fiduciary rule on annuity product development and pricing. It covers three key areas: 1) An overview of the fiduciary rule, including timelines and impacted asset classes. 2) The impact on product design, such as standardization, reduced commissions and fees, and limitations on complex features. 3) The impact on product pricing, including lower lapse assumptions, expense implications, and the need for pricing refinements. The overall impact will be a repositioning of variable annuity and fixed index annuity products under the new regulations.
This document summarizes a panel discussion on risk, controls, and governance of models. The panel included three experts: Mrinal Raghupathi from USAA, Nicholas Benoit from American National Insurance Company, and Guillaume Briere-Giroux from Oliver Wyman. The panel aimed to discuss model risk in an interactive format and provide resources on related standards and guidance.
1. The document provides an overview and update on the fixed indexed annuity market from an Oliver Wyman presentation.
2. It discusses trends in the market including growing sales, new entrants and distribution channels, private equity involvement, and re-domiciling of some carriers.
3. The presentation covers product trends like hybrid VA/FIA designs, volatility control indices, liquidity features, and benefit riders including indexed income growth. It also addresses pricing assumptions, valuation issues, and risk management considerations.
This document provides a summary of the annuity market by:
1. Discussing market dynamics such as growing fixed indexed annuity and deferred income annuity sales.
2. Outlining key product trends including hybrid variable and fixed indexed annuities, volatility control strategies, and nursing home benefits.
3. Highlighting issues around pricing, valuation, and risk management like modeling lapse assumptions, hedging guarantees, and regulatory changes.
4. Identifying areas of focus including interest rates, M&A activity, product innovation, and behavioral assumptions.
This document summarizes an indexed annuity pricing webcast. It discusses differences between fixed indexed annuity (FIA) guaranteed lifetime withdrawal benefits (GLWBs) and variable annuity (VA) GLWBs. Specifically, FIA GLWB pricing shares many practices with VA GLWB pricing, except risk neutral valuation is less commonly used for FIAs. A thought experiment compares returns on a fixed account FIA GLWB to a fully hedged VA GLWB. Key differences in reserving considerations between FIA and VA GLWBs are also outlined. The document concludes with a discussion of hedging FIA GLWBs and important related considerations.
Actuarial Risks for Annuities - Considering Dynamic Policyholder BehaviorGuillaume Briere-Giroux
1. The document discusses predictive modeling techniques used to study policyholder behavior for annuity products and living benefits.
2. Predictive modeling allows analysis of multiple risk drivers simultaneously and requires less data to converge than traditional methods. It also enables testing how behavior changes over time.
3. For annuity guaranteed lifetime withdrawal benefits, integrated behavioral cohorts are used including "efficient", "partial", "excess", and "waiting" users. Assumptions need to consider lapse and utilization rates holistically.
4. Behavior modeling interacts with economic scenario modeling from simple to complex approaches. Pitfalls to avoid include not fully using data, ignoring key risk drivers, and not accounting for seasoning effects over time.
VM-21 prescribes assumptions for the standard projection amount calculation, including policyholder behavior assumptions. The assumptions are more granular and reflect industry experience. Lapse rates vary by product type, duration, and benefit value. Partial withdrawals also vary by product type from 1.5-3.5% of account value generally. Mortality uses 2012 IAM Basic with Scale G2 and is adjusted for contracts with guarantees. The withdrawal delay cohort method constructs cohorts to model withdrawals for certain products based on issue-age cumulative withdrawal curves.
This document discusses how predictive analytics can impact assumption setting in financial models. It describes how predictive modeling is increasingly being used to enhance experience studies and assumption setting. Some key impacts are more attention to secondary variables, opportunities to test external variables, and more comprehensive data-driven discussions. The document provides an example of how predictive analytics can be used to create integrated policyholder behavior cohorts for a guaranteed lifetime withdrawal benefit product. It also discusses computational and other considerations for integrating predictive analytics into financial models.
Presentation for 2014 Valuation Actuary Symposium (New York).
After an introduction to the history of variable annuity financial modeling and current modeling paradigms, this presentation covers the unique modeling considerations related to variable annuities.
Oliver Wyman Modeling Managing and Pricing of Living Benefit Risks May 2014Guillaume Briere-Giroux
2014 Life and Annuity Symposium Session 83 / Virtual Broadcast: This presentation provides an industry overview of practices related to the modeling, pricing and risk management of living benefit risks and qualitatively positions FIA GLWBs (covered by co-speakers in more detail via a case study) relative to other living benefits.
ACHS Spring 2019 Long Duration GAAP Targeted Improvements - Market TrendsGuillaume Briere-Giroux
The document discusses trends in the actuarial labor market in the United States. It finds that there is currently a shortage of around 1,000 qualified life actuaries due to several regulatory changes increasing demand, including FASB target improvements, PBR, IFRS17, and PCAOB guidance. The supply of new life actuaries has been increasing at a steady rate of around 450 per year through organic growth, but this is insufficient to meet the additional demand of around 1,600 actuaries driven by these regulatory changes over the next few years. This is leading to a "race for talent" and rising costs for top actuaries. Potential solutions discussed include tapping actuaries from other practices, international mobility, and leveraging
Oliver Wyman Indexed Annuity Risk Management Strategies - 2014 SOA Annual Mee...Guillaume Briere-Giroux
This document discusses indexed annuity risk management strategies. It notes that interest rate and credit risk are the primary risks for fixed indexed annuities, while lapse and benefit utilization are the primary insurance risks. It then covers different product design strategies, benefit rider strategies, and evolving asset-liability management and hedging strategies used by insurance carriers to balance multiple risk drivers and accounting constraints. The key takeaways are that fixed indexed annuities and variable annuities have distinct risk paradigms, new product features are becoming more complex, and hedging and ALM targets are multi-dimensional.
We remain cognizant of managing the liquidity, concentration, credit and duration in our fixed income
schemes to provide investor with better risk adjusted returns.
Dashboard for Currency Risk Management & HedgingBenjamin Koch
Good FX management means providing CFOs with the Treasury reporting information they require. Benjamin Koch and Achim Kreuzer suggest a dashboard approach
Enterprise value is calculated as the equity value of a company plus its net interest-bearing debt. There are different methods for valuing a company such as capitalizing maintainable earnings or discounting future cash flows. Discount rates are important for valuations and are calculated based on factors like risk-free rates, market risk premiums, and debt-to-equity ratios. The global financial crisis impacted valuations through higher interest costs and lower debt availability compared to pre-crisis levels. Australia depends heavily on China's economy avoiding significant problems for business valuations to continue improving after being negatively impacted by the global financial crisis.
Camel Analysis of IDCs Rank of Financial RatiosJohn Rickmeier
This document discusses IDC's CAMEL analysis and ranking system for financial institutions. The CAMEL analysis evaluates institutions based on 5 factors: Capital adequacy, Asset quality, Management effectiveness, Earnings, and Liquidity. For each factor, IDC calculates various financial ratios and assigns weights to derive an overall rank between 1-300, with 300 being the best. IDC claims this ranking system can identify deteriorating or improving performance earlier than other methods. The online platform will provide the CAMEL analysis and rankings for over 13,000 financial institutions.
This document outlines various types of risks faced by treasury operations including interest rate risk, foreign exchange risk, credit risk, commodity risk, operational risk, liquidity risk, and other risks. It provides details on measuring and managing each type of risk through approaches like sensitivity analysis, scenario analysis, stress testing, value at risk and monitoring key risk indicators. An example is provided to illustrate operational risk from a large trading error at the Tokyo Stock Exchange.
This document discusses key terms in venture term sheets, including economics terms related to valuation, liquidation preference, anti-dilution provisions, and redemption provisions. It also discusses control terms related to vesting provisions, protective provisions, drag along and tag along rights. The document provides explanations and considerations for founders around these important legal and financial terms that will impact the deal structure and governance of the new venture.
This document discusses key aspects of developing a robust risk operations framework for a credit reporting bureau. It emphasizes maintaining a balance between customer experience and collecting amounts due while ensuring adequate risk mitigation strategies are in place. It also outlines important components of an effective dialer strategy like best time to call analysis and segmentation of customer inventory by risk and balance. Finally, it stresses the importance of establishing metrics to regularly monitor success across various operational measures and enabling data-driven executive decision making.
1. The document discusses accounting principles and concepts from Accounting Principles, 7th Edition. It covers generally accepted accounting principles, the conceptual framework developed by the Financial Accounting Standards Board, objectives of financial reporting, qualitative characteristics of accounting information, and key assumptions and principles used in accounting.
2. The conceptual framework consists of objectives of financial reporting, qualitative characteristics of useful information, elements of financial statements, and operating guidelines including assumptions, principles, and constraints. The primary objective of financial reporting is to provide decision-useful information to investors and creditors.
3. Qualitative characteristics that make information useful include relevance, reliability, comparability, consistency, and understandability. Key principles discussed include revenue recognition using the percentage
1. The document provides an overview and update on the fixed indexed annuity market from an Oliver Wyman presentation.
2. It discusses trends in the market including growing sales, new entrants and distribution channels, private equity involvement, and re-domiciling of some carriers.
3. The presentation covers product trends like hybrid VA/FIA designs, volatility control indices, liquidity features, and benefit riders including indexed income growth. It also addresses pricing assumptions, valuation issues, and risk management considerations.
This document provides a summary of the annuity market by:
1. Discussing market dynamics such as growing fixed indexed annuity and deferred income annuity sales.
2. Outlining key product trends including hybrid variable and fixed indexed annuities, volatility control strategies, and nursing home benefits.
3. Highlighting issues around pricing, valuation, and risk management like modeling lapse assumptions, hedging guarantees, and regulatory changes.
4. Identifying areas of focus including interest rates, M&A activity, product innovation, and behavioral assumptions.
This document summarizes an indexed annuity pricing webcast. It discusses differences between fixed indexed annuity (FIA) guaranteed lifetime withdrawal benefits (GLWBs) and variable annuity (VA) GLWBs. Specifically, FIA GLWB pricing shares many practices with VA GLWB pricing, except risk neutral valuation is less commonly used for FIAs. A thought experiment compares returns on a fixed account FIA GLWB to a fully hedged VA GLWB. Key differences in reserving considerations between FIA and VA GLWBs are also outlined. The document concludes with a discussion of hedging FIA GLWBs and important related considerations.
Actuarial Risks for Annuities - Considering Dynamic Policyholder BehaviorGuillaume Briere-Giroux
1. The document discusses predictive modeling techniques used to study policyholder behavior for annuity products and living benefits.
2. Predictive modeling allows analysis of multiple risk drivers simultaneously and requires less data to converge than traditional methods. It also enables testing how behavior changes over time.
3. For annuity guaranteed lifetime withdrawal benefits, integrated behavioral cohorts are used including "efficient", "partial", "excess", and "waiting" users. Assumptions need to consider lapse and utilization rates holistically.
4. Behavior modeling interacts with economic scenario modeling from simple to complex approaches. Pitfalls to avoid include not fully using data, ignoring key risk drivers, and not accounting for seasoning effects over time.
VM-21 prescribes assumptions for the standard projection amount calculation, including policyholder behavior assumptions. The assumptions are more granular and reflect industry experience. Lapse rates vary by product type, duration, and benefit value. Partial withdrawals also vary by product type from 1.5-3.5% of account value generally. Mortality uses 2012 IAM Basic with Scale G2 and is adjusted for contracts with guarantees. The withdrawal delay cohort method constructs cohorts to model withdrawals for certain products based on issue-age cumulative withdrawal curves.
This document discusses how predictive analytics can impact assumption setting in financial models. It describes how predictive modeling is increasingly being used to enhance experience studies and assumption setting. Some key impacts are more attention to secondary variables, opportunities to test external variables, and more comprehensive data-driven discussions. The document provides an example of how predictive analytics can be used to create integrated policyholder behavior cohorts for a guaranteed lifetime withdrawal benefit product. It also discusses computational and other considerations for integrating predictive analytics into financial models.
Presentation for 2014 Valuation Actuary Symposium (New York).
After an introduction to the history of variable annuity financial modeling and current modeling paradigms, this presentation covers the unique modeling considerations related to variable annuities.
Oliver Wyman Modeling Managing and Pricing of Living Benefit Risks May 2014Guillaume Briere-Giroux
2014 Life and Annuity Symposium Session 83 / Virtual Broadcast: This presentation provides an industry overview of practices related to the modeling, pricing and risk management of living benefit risks and qualitatively positions FIA GLWBs (covered by co-speakers in more detail via a case study) relative to other living benefits.
ACHS Spring 2019 Long Duration GAAP Targeted Improvements - Market TrendsGuillaume Briere-Giroux
The document discusses trends in the actuarial labor market in the United States. It finds that there is currently a shortage of around 1,000 qualified life actuaries due to several regulatory changes increasing demand, including FASB target improvements, PBR, IFRS17, and PCAOB guidance. The supply of new life actuaries has been increasing at a steady rate of around 450 per year through organic growth, but this is insufficient to meet the additional demand of around 1,600 actuaries driven by these regulatory changes over the next few years. This is leading to a "race for talent" and rising costs for top actuaries. Potential solutions discussed include tapping actuaries from other practices, international mobility, and leveraging
Oliver Wyman Indexed Annuity Risk Management Strategies - 2014 SOA Annual Mee...Guillaume Briere-Giroux
This document discusses indexed annuity risk management strategies. It notes that interest rate and credit risk are the primary risks for fixed indexed annuities, while lapse and benefit utilization are the primary insurance risks. It then covers different product design strategies, benefit rider strategies, and evolving asset-liability management and hedging strategies used by insurance carriers to balance multiple risk drivers and accounting constraints. The key takeaways are that fixed indexed annuities and variable annuities have distinct risk paradigms, new product features are becoming more complex, and hedging and ALM targets are multi-dimensional.
We remain cognizant of managing the liquidity, concentration, credit and duration in our fixed income
schemes to provide investor with better risk adjusted returns.
Dashboard for Currency Risk Management & HedgingBenjamin Koch
Good FX management means providing CFOs with the Treasury reporting information they require. Benjamin Koch and Achim Kreuzer suggest a dashboard approach
Enterprise value is calculated as the equity value of a company plus its net interest-bearing debt. There are different methods for valuing a company such as capitalizing maintainable earnings or discounting future cash flows. Discount rates are important for valuations and are calculated based on factors like risk-free rates, market risk premiums, and debt-to-equity ratios. The global financial crisis impacted valuations through higher interest costs and lower debt availability compared to pre-crisis levels. Australia depends heavily on China's economy avoiding significant problems for business valuations to continue improving after being negatively impacted by the global financial crisis.
Camel Analysis of IDCs Rank of Financial RatiosJohn Rickmeier
This document discusses IDC's CAMEL analysis and ranking system for financial institutions. The CAMEL analysis evaluates institutions based on 5 factors: Capital adequacy, Asset quality, Management effectiveness, Earnings, and Liquidity. For each factor, IDC calculates various financial ratios and assigns weights to derive an overall rank between 1-300, with 300 being the best. IDC claims this ranking system can identify deteriorating or improving performance earlier than other methods. The online platform will provide the CAMEL analysis and rankings for over 13,000 financial institutions.
This document outlines various types of risks faced by treasury operations including interest rate risk, foreign exchange risk, credit risk, commodity risk, operational risk, liquidity risk, and other risks. It provides details on measuring and managing each type of risk through approaches like sensitivity analysis, scenario analysis, stress testing, value at risk and monitoring key risk indicators. An example is provided to illustrate operational risk from a large trading error at the Tokyo Stock Exchange.
This document discusses key terms in venture term sheets, including economics terms related to valuation, liquidation preference, anti-dilution provisions, and redemption provisions. It also discusses control terms related to vesting provisions, protective provisions, drag along and tag along rights. The document provides explanations and considerations for founders around these important legal and financial terms that will impact the deal structure and governance of the new venture.
This document discusses key aspects of developing a robust risk operations framework for a credit reporting bureau. It emphasizes maintaining a balance between customer experience and collecting amounts due while ensuring adequate risk mitigation strategies are in place. It also outlines important components of an effective dialer strategy like best time to call analysis and segmentation of customer inventory by risk and balance. Finally, it stresses the importance of establishing metrics to regularly monitor success across various operational measures and enabling data-driven executive decision making.
1. The document discusses accounting principles and concepts from Accounting Principles, 7th Edition. It covers generally accepted accounting principles, the conceptual framework developed by the Financial Accounting Standards Board, objectives of financial reporting, qualitative characteristics of accounting information, and key assumptions and principles used in accounting.
2. The conceptual framework consists of objectives of financial reporting, qualitative characteristics of useful information, elements of financial statements, and operating guidelines including assumptions, principles, and constraints. The primary objective of financial reporting is to provide decision-useful information to investors and creditors.
3. Qualitative characteristics that make information useful include relevance, reliability, comparability, consistency, and understandability. Key principles discussed include revenue recognition using the percentage
The document discusses approaches to stress testing for banks, including scenario analysis, sensitivity analysis, and enterprise-wide stress testing. It also outlines increasing supervisory expectations around stress testing from regulators, including greater focus on qualitative assumptions, risk modeling methodology, data management, and governance. The challenges of complying with capital planning and stress testing requirements are also examined.
Denbury Resources reported financial and operational results for the third quarter of 2016. Some key points:
- Total debt principal was reduced by $562 million year-to-date through open market debt purchases, debt exchanges, and a reduction in the bank credit facility balance.
- Adjusted net income was $1 million for the third quarter, compared to $29 million in the previous quarter.
- Average realized oil prices per barrel were $42.12 for the third quarter when including commodity derivative settlements, compared to $52.61 in the previous quarter.
- Total injected CO2 volumes averaged 459 million cubic feet per day for the third quarter, a 35% reduction from the previous quarter due
The document provides an overview of the SFTR regulation which aims to increase transparency of securities financing transactions. It discusses key aspects such as the scope, reporting requirements, phases of implementation, and impact on various entities. The regulation introduces transaction reporting obligations for repo, buy-sell backs, securities lending, and other transactions. Firms must report transaction and position details to trade repositories within one day of the transaction or lifecycle event. Perpetual Motion Consulting offers services to help firms understand their obligations and implement compliant solutions in a cost-effective manner.
This document summarizes a presentation about assessing CECL models. It discusses that CECL requires estimating lifetime expected credit losses using multiple components and economic scenarios, which makes the models complex and outcomes difficult to assess. It emphasizes that back-testing, sensitivity analysis, and scenario analysis are important to evaluate whether the models perform reasonably under different economic conditions and assess the impact of assumptions. It also stresses the need to review outcomes and test assumptions at granular levels by risk drivers and perform qualitative adjustments through model risk management.
Accenture 2015 Global Structural Reform Studyaccenture
Accenture’s 2015 Global Structural Reform Study – based on a survey of 131 banking, insurance and capital markets institutions across regions – confirms that, while institutions are investing in their response to Global Structural Reform (GSR), their plans still appear focused on meeting regulatory demands alone, rather than accounting for the more strategic implications of structural reform.
Highlights from the study's conclusions include:
- GSR is re-writing the financial services landscape
- Investment is clear, but strategy less so
- Three suggested principles for unlocking the potential of GSR
Download the report and visit https://www.accenture.com/accenture-2015-global-structural-reform-study.aspx to learn more.
7
WEEK 2 TEAM ASSIGNMENT
Week 2 Team Assignment
Learning Team C:
Leigha Covington, Lauren Immel, Melissa Simmons, and Toni Winiavski
ACC/492
January 30, 2017
Ding Hardin
When conducting audits, it is important to follow specific auditing procedures to ensure accuracy and quality. To provide the best type of audit we must create steps for each type of account in sub-steps to ensure that the system that conducts the audit provides accurate reports. The types of accounts that we should audit will be cash, Financial instruments such as cash counting machines registers or anything their processes the transactions, sales audit, receivable accounts audit, and the types of Cycles. Each step in all audits contains work programs that help determine if the systems are fully integrated within each other to communicate effectively for the program to work.
Audit
I. Understand what needs to be audited.
A. Get proper documents to audit
1. Copies of the company’s incorporation documents
2. Chart of accounts:
3. Organization chart
4. Internal control documentation
5. Stock and bond issuances
6. Prior years’ analytical procedures
B. Create audit plan
Cash
· List of all users who handle cash
· List of transactions and receipts
· Confirm accuracy of records
· Find errors or test for errors
· Make sure all cash/ sales have been finalized
· Collect bank records/ deposits with receipts
· Accounts receivable records/ checks that have been processed
· Debts are satisfied
· Update loss prevention
· Review Financial Instruments
· Assess types of financial instruments
· Determine what type of audit procedures should be used (AICPA standards?)
· Review cash flow to understand the total usage of instruments
· Review activity logs; security/ checkpoint logs; user logs
· Make sure data is backed up/saved
· Sales Audit
· Gather data to be reviewed
· Review sales process
· Review sales cost against sales revenue
· Evaluate system for effectiveness of a sale process
· Review internal structure to find strengths and weaknesses
· Review records
Accounts Receivable
· Review general ledger
· Make sure journal entries match and are detailed
· Test and review invoices to make sure accounts have been billed correctly
· Write off bad debts
· Make sure sales were processed in the correct financial period
· Create a trend analysis
· Cycle audit to ensure cycle is not providing redundant info
· Finalize audit
· Review audit
· Present results
AUDIT PROGRAM FOR SALES
I. External customer confirmations
a. Test the balances confirmed against general ledger balances
II. Confirm that sales are recorded in the proper periods
a. Review invoices and shipping documentation to evaluate timing
III. Accounts Receivable includes all balances owed to the entity at reporting date
a. Test invoices that were issued around period closing date to evaluate timeliness
IV. Accounts receivable balances are owed to the entity and not outside parties
a. Test general procedure to ensure.
Strategic implications of IFRS9 oliver wymanGeoff Holmes
IFRS9 accounting rules will significantly impact credit providers by requiring earlier recognition of lifetime losses, negatively impacting returns. Consumer credit and SME products will be most affected due to their long duration, high risk/return profiles, and rapid credit quality changes. Lenders must understand the portfolio impacts, analyze response options like interpretating rules and tactical/strategic changes, prioritize responses balancing various factors, and implement initiatives to mitigate unprofitable segments. Early action allows optimizing the response ahead of competitors.
Accenture 2015 Global Structural Reform Study: Unlocking the Potential of Glo...Accenture Insurance
As they reshape the financial services industry in light of the 2007-2008 financial crisis, global regulators have introduced a series of structural reform regulations to help build resilience. Global Structural Reform (GSR) is creating a new financial services ecosystem for institutions.
Accenture’s 2015 Global Structural Reform Study finds senior management working to thrive in what amounts to an all-new financial services landscape. They are investing effort and funds in their response to GSR, but their focus is on meeting regulatory demands. While that represents a good starting point, our study finds institutions might be missing out when it comes to meeting the strategic implications of reform and using reform as an opportunity to reposition the organization for sustainable growth
The new UAE insurance regulations will have a positive impact on insurer creditworthiness and policyholder protection according to S&P. The regulations introduce stricter solvency requirements, investment limits, independent actuarial reviews, and risk management functions. S&P believes the regulations will strengthen insurers' financial positions over the medium to long term by improving underwriting discipline and risk management. However, stricter reporting requirements may increase operational costs and consolidation in the market. Overall, S&P views the changes as credit positive for the UAE insurance industry.
The implementation of the MAR in 2010 will
provide a valuable opportunity for insurers
to assess the effectiveness of their internal
controls and the accuracy of their financial
reporting. Insurers must promptly develop a
strategy for compliance with the MAR if they
have not done so already. A set of corporate
norms for complying with the new MAR
has yet to develop, but actuaries have the
knowledge and skills to assist in many aspects
of the process and can help determine the set
of best practices moving forward.
Calibre Mining provides a summary of its operating results for Q4 2019 from its La Libertad and El Limon mines in Nicaragua. Production at La Libertad was 24,419 ounces at an AISC of $1,577/oz, while El Limon produced 11,458 ounces at an AISC of $928/oz. Exploration drilling continued to expand resources at both mines. The company also discusses its execution of operational plans, discovery of new resources, and opportunities for continued growth.
Problems based on accounting standards and guidance notes finalDwara Balaji
This document contains 12 questions related to accounting standards and guidance notes. The questions cover topics such as events occurring after the balance sheet date, prior period items, pre-incorporation expenses, revaluation of fixed assets, revenue recognition, extraordinary items, cash flow statements, and changes in accounting policies. For each question, the relevant accounting treatments, disclosures, or guidance from standards are discussed in detail in the response.
From Analytical Actuarial to Fintech by CF Yam at HKU on 10 March 2016CF Yam
The document discusses the transition from traditional analytical actuarial processes to modern dynamic risk management in the era of fintech. It notes that analytical approaches are no longer sufficient due to factors like increased volatility, complex products, and new regulations. Modern risk management requires more sophisticated modeling of risks like insurance, market, credit, liquidity and operational risks. The rise of fintech is disrupting financial services and creating new opportunities for risk management professionals to develop specialized skills and take on expanded roles. Actuaries are well-positioned to succeed in risk management with skills in data analytics, modeling, and understanding different risk types.
This document provides an overview of Progressive Corporation's loss reserving practices and process. Some key points:
1) Progressive aims to have adequate but not excessive loss reserves that develop with minimal variation over time. Reserves are estimates of future claim payments and are analyzed by segment based on similar risk characteristics.
2) Accurate reserving is important for achieving Progressive's financial goals of a 4% underwriting profit and profitable growth. Reserves affect pricing and profitability.
3) Loss reserves refer to estimates of unpaid losses while loss adjustment expense (LAE) reserves refer to estimates of unpaid loss adjustment costs. Reserves are analyzed by accident year when the loss occurred rather than just calendar year.
4
This document provides an overview and summary of The Progressive Corporation's 2006 Report on Loss Reserving Practices. The report examines Progressive's loss reserving process and how it affects their financial results. It includes sections on their financial objectives, how reserve development affects financial reporting, the different types of reserves, how reserves are estimated by segment, and recent process enhancements. The goal is to help stakeholders understand Progressive's loss reserving methodology and ensure reserves are adequate while developing with minimal variation over time.
The document summarizes proposed changes to accounting standards for impairment of financial assets by the FASB and IASB. The changes will require companies to estimate expected credit losses over the lifetime of in-scope financial assets from the origination date, replacing the previous "incurred loss" model. This will impact many areas of companies including credit loss modeling, accounting, reporting processes and controls, data and infrastructure. The document outlines key questions companies should consider to assess readiness and plan implementation of the new standards.
Similar to Val Act 2015 - Upcoming Developments in Annuity Valuation (20)
How to Invest in Cryptocurrency for Beginners: A Complete GuideDaniel
Cryptocurrency is digital money that operates independently of a central authority, utilizing cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies are decentralized and typically operate on a technology called blockchain. Each cryptocurrency transaction is recorded on a public ledger, ensuring transparency and security.
Cryptocurrencies can be used for various purposes, including online purchases, investment opportunities, and as a means of transferring value globally without the need for intermediaries like banks.
Dr. Alyce Su Cover Story - China's Investment Leadermsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
The Impact of Generative AI and 4th Industrial RevolutionPaolo Maresca
This infographic explores the transformative power of Generative AI, a key driver of the 4th Industrial Revolution. Discover how Generative AI is revolutionizing industries, accelerating innovation, and shaping the future of work.
TEST BANK Principles of cost accounting 17th edition edward j vanderbeck mari...Donc Test
TEST BANK Principles of cost accounting 17th edition edward j vanderbeck maria r mitchell.docx
TEST BANK Principles of cost accounting 17th edition edward j vanderbeck maria r mitchell.docx
TEST BANK Principles of cost accounting 17th edition edward j vanderbeck maria r mitchell.docx
Val Act 2015 - Upcoming Developments in Annuity Valuation
1. Upcoming Developments in Annuity
Valuation
August 31, 2015
Guillaume Briere-Giroux, FSA, MAAA, CFA
Chris Conrad, FSA, MAAA
2. Agenda
I. Annuity valuation actuary’s radar
II. AG 43 issues refresh
III. CCAR primer
IV. Group discussion and audience polling
3. Annuity valuation actuary’s radar
Contingent deferred annuities
C3 Phase 2 and AG 43
CCAR
Revisions of AG 33 for non-
elective benefits
VM-22
Indexed-linked variable
annuities
Variable annuity captives
2012 IAR valuation table
Potential changes to valuation rates
4. AG 43 issues refresh
Select observations1 Commentary
1 Counterintuitive impact of hedging
• Increases in TAR
• Asymmetry across hedging strategies
2 Standard scenario dominates more than
what may have been intended
• Survey showed prominence of standard scenario as driver of
reserves
• Dependence of results on hedging strategy
3 Statutory sensitivity is not aligned with
risk fundamentals
• Use of greatest present value can cause distortions relative to long
term economics
• Impact of hedging in standard scenario vs. stochastic calculations
Other highlighted complicating factors included treatment of reinsurance, taxation,
and seriatim vs. aggregate calculations of reserves. An all encompassing observation
was that the “volatility of capital requirements has increased with the potential for
undue, pro-cyclical changes in results”.
1Source: Observations on emerging variable annuity statutory accounting results, Oliver Wyman 2010
5. CCAR annuity primer
CCAR requires robust and granular nine quarter forecasts
Need Description
1 Realistic projections of economics
• Explicit projection of dynamic hedging strategy and other
management actions (e.g., credited rate setting)
• Modeling of existing assets and reinvestments (general account
business and assets backing guarantee reserves)
2 US Statutory financials
• AG 43 reserves revaluation
• C3-Phase 2 and / or rating agency capital
• Cash Flow Testing, potentially C3 Phase 1
3 US GAAP financials
• FAS 133 / 157 for embedded derivatives
• SOP03-1 for life contingent benefits
• Dynamic unlocking of DAC and SOP 03-1 (including assumptions)
• Income statement, balance sheet and profit by source analysis
4 Economic scenarios
• Real world scenarios for AG 43, Cash Flow Testing and SOP 03-1
• Risk neutral scenarios for hedging and FAS 133
5 Other
• Corporate taxes
• New business
• Reinsurance