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The auditor’s response to the risks of material misstatement arising from estimates made in applying IFRS 17 Insurance Contracts.
We are pleased to share “The auditor’s response to the risks of material misstatement arising from estimates made in applying IFRS 17 Insurance Contracts” which has been issued by the Global Public Policy Committee (GPPC).
The GPPC comprises representatives of the six largest accounting networks being BDO, Deloitte, EY, Grant Thornton, KPMG and PwC.
IFRS 17 heralds a new era of accounting for insurance contracts because it sets out principles-based requirements that aim to improve the comparability of the measurement and presentation of insurance contracts across entities reporting in jurisdictions applying International Financial Reporting Standards (IFRS). The impact of IFRS 17 will be felt by many stakeholders including, but not limited to, preparers of financial statements, those charged with the governance of entities that issue insurance contracts, investors, regulators, analysts and auditors.
With IFRS 17’s anticipated mandatory effective date of January 1, 2023 moving ever closer, all types of businesses, not just registered insurance businesses, need to start evaluating the impact of the Standard now. In particular, audit committees should be considering the quality of the financial reporting of IFRS 17.
With this in mind, the GPPC has issued another paper which builds on the paper issued in 2020 “Implementation of IFRS 17 Insurance Contracts – Consideration for those charged with governance.” This additional paper focusses on the auditor’s approach to auditing estimates and associated judgments made in the application of IFRS 17.
The publication mentioned above follows this IFRS Adviser Alert.