Audit certificate and report

38. As required under the Act, an insurer’s Approved Auditor must prepare a certificate relating to the insurer’s yearly statutory accounts on an annual basis and provide that certificate to the insurer within the time prescribed in paragraph 22.[28] The certificate must be addressed to the Board of the insurer and provide the Approved Auditor’s opinion in respect of the insurer’s yearly statutory accounts. In preparing the certificate, the Approved Auditor must have regard to relevant professional standards and guidance notes issued by the Auditing and Assurance Standards Board, to the extent that they are not inconsistent with the requirements of this Prudential Standard.

39. The certificate must specify whether, in the Approved Auditor’s opinion, the yearly statutory accounts of the insurer present a true and fair view of the results of the insurer’s operations for the year and financial position at year end, in accordance with:

(a) the provisions of the Act and prudential standards, the Collection of Data Act and reporting standards; and

(b) to the extent that they do not contain any requirements that conflict with the aforementioned, Australian accounting standards and other mandatory professional reporting requirements in Australia.

40. Where, for reasons beyond their control, the Approved Auditor is unable to provide a certificate that complies with paragraph 39 (for example, if there are accounting records that have not been appropriately kept, transactions that appear irregular or that have not been accurately or properly recorded, requests for information and explanation that have not been met, or aspects of the accounts that do not represent a true and fair view of the transactions and financial position), the certificate must be qualified and contain details of these matters.

41. An Approved Auditor must prepare a report on an annual basis and provide that report to the insurer by the time prescribed in paragraph 22.[29] The report must be addressed to the Board of the insurer and provide the Approved Auditor’s opinion on a range of matters. In preparing the report, the Approved Auditor must have regard to professional standards and guidance notes issued by the Auditing and Assurance Standards Board, to the extent that they are not inconsistent with the requirements of this Prudential Standard. This report must be based on at least a limited assurance engagement.[30]

42. The report must specify the results of the Approved Auditor’s investigations, namely whether:

(a) there exist systems, procedures and controls, that are kept up to date, which address compliance with all prudential requirements (including requirements imposed by the Act, prudential standards, the Collection of Data Act, reporting standards, conditions on the insurer’s authorisation and any other requirements imposed by APRA in writing). If the Approved Auditor is of the opinion that the insurer does not have such systems, procedures and controls, the report must detail the reasons for this opinion;