Obligations of a life company

6. Under the Act, a life company must appoint an auditor (Auditor).[2]

7. A life company must ensure that its Auditor:

(a) satisfies the eligibility criteria in Prudential Standard CPS 520 Fit and Proper (CPS 520) applicable to an Auditor;

(b) is a fit and proper person in accordance with the life company’s fit and proper policy as required by CPS 520, including those requirements that apply specifically to the Auditor; and

(c) satisfies the auditor independence requirements in Prudential Standard CPS 510 Governance.

8. A life company must ensure that its Auditor has access to all relevant data, information, reports and staff of the life company (and must take all reasonable steps to ensure access to contractors of the life company) that its Auditor reasonably believes are necessary to fulfil his or her responsibilities.[3] This will include access to the life company’s Board[4], Board Audit Committee and internal auditors as required.

9. A life company must ensure that its Auditor is fully informed of all prudential requirements applicable to the life company. In addition, the life company must ensure that the Auditor is provided with any other information APRA has provided to the life company that may assist the Auditor in fulfilling his or her role and responsibilities under this Prudential Standard.

10. A life company must ensure that the following are provided to its Board or Board Audit Committee (if not already sighted by the Board or Board Audit Committee):

(a) reports, provided by the Auditor in accordance with this Prudential Standard, and any associated assessments and other material prepared in connection with fulfilling the requirements of this Prudential Standard;

(b) commentary or responses provided by APRA to the life company on reports provided by the Auditor, and any associated assessments and other material; and

(c) any commentary or response on the reports, associated assessments and other material provided by the Auditor that are given by the life company to APRA.

11. A life company, if requested by APRA, must within a reasonable time provide APRA with the terms of engagement, other instructions or correspondence, including management letters, that may have a bearing on:

(a) the scope or conduct of the work undertaken by the Auditor in accordance with this Prudential Standard; and

(b) the form, content (including findings made or opinions expressed by the Auditor) or coverage of the reports provided in accordance with this Prudential Standard.