IPT08600 - IPT audit assurance: management of large insurers

All Large Business Service work is subject to compliance with the ‘Review of Links with Large Business’.

Management of large or complex insurers will generally follow the principles used in the audit assurance of large VAT traders. However, there are very few insurers that warrant the large trader approach solely for IPT. 

Pattern of revenue management

There is no single, simple revenue management pattern that is suitable for large insurers. The degree of autonomy enjoyed by the departments and branches of a company varies considerably. Therefore the following is only general framework within which you can design your own specific, focused audit assurance programme. As with all revenue management, available resources should be allocated in accordance with perceived risk.

Multi-year assurance programmes are familiar from VAT large business assurance. This approach will usually require an initial visit to be carried out to establish a general picture of the insurer. This would then inform a plan to look at all aspects of the insurer’s business over say a two or three year period. In the second and third years of this cycle, selected areas of the insurer’s business would be examined in depth. A high degree of audit assurance is obtained through this detailed approach.

A hypothetical multi-year programme for a large or complex insurer might, look like this.

Year 1    

• Initial visit. General overview of scale and nature of business, procedures and computer systems.
• Informs decision to be made by local staff as to which are key systems and main risk areas and the resources to be allocated.

Year 2

• Detailed scrutiny of first main risk area or system (system and substantive checks), plus any additional high level or other checks
• Review and overview

Year 3

• Detailed scrutiny of secondary risk area or System (system and substantive checks) plus any additional high level or other checks.
• Review and overview.