ASOP 21
(RESPONDING TO OR ASSISTING AUDITORS OR EXAMINERS IN CONNECTION WITH FINANCIAL AUDITS, FINANCIAL REVIEWS, AND FINANCIAL EXAMINATIONS)
SECTION 2
(DEFINITIONS)

Section 2
Definitions

ASOP 21 | §2.0 | INTRO TO SECTION 2

The terms below are defined for use in this standard of practice.

ASOP 21 | §2.1 | AUDITOR

The external firm or professional engaged to conduct a financial audit or financial review in accordance with generally accepted auditing standards for the purpose of issuing an opinion on a financial statement.

ASOP 21 | §2.2 | CONTRACT PERFORMANCE

The fulfillment of an entity’s obligations required by a contract, for example, compliance under the provisions of a reinsurance contract or under a contract that includes a retrospective rate adjustment or experience refund.

ASOP 21 | §2.3 | ENTITY

An institution, company, corporation, partnership, government agency, university, employee benefit plan, or other organization that may be subject to a financial audit, financial review, or financial examination, as well as the individuals who are authorized to act on behalf of the organization.

ASOP 21 | §2.4 | EXAMINER

An employee of or contractor to state or federal regulators performing a financial examination on behalf of a governmental agency responsible for oversight of the financial condition of the entity.

ASOP 21 | §2.5 | FINANCIAL AUDIT

An evaluation of financial statements or internal controls over financial reporting by an auditor, conducted under generally accepted auditing standards, with a view to expressing an opinion on whether the financial statements are presented fairly in all material respects within the applicable financial reporting framework or on the effectiveness of the entity’s internal controls over financial reporting.

ASOP 21 | §2.6 | FINANCIAL EXAMINATION

An evaluation of an entity’s financial condition by an examiner. It will generally include a review of the financial statement and will often include a review of financial strength, corporate governance, or management oversight.

ASOP 21 | §2.7 | FINANCIAL REVIEW

An evaluation, by performing limited procedures, of financial statements or internal controls over financial reporting by an auditor, conducted under generally accepted auditing standards. The evaluation supports an auditor’s opinion on whether any material modifications should be made to the financial statements or to the entity’s internal controls over financial reporting. A financial review is often performed on interim financial statements. For this standard, a financial review does not include a review conducted for any other purpose, such as in support of a potential M&A or IPO transaction.

ASOP 21 | §2.8 | FINANCIAL STATEMENTS

Reports on the financial position and the financial activities of an entity, prepared in accordance with accounting requirements prescribed or permitted by insurance regulators or accounting standards.

ASOP 21 | §2.9 | GENERALLY ACCEPTED AUDITING STANDARDS

Sets of standards promulgated by various standards-setting bodies by which audits or reviews are performed and against which the quality of audits or reviews may be judged.

ASOP 21 | §2.10 | RESPONDING ACTUARY

An actuary who is authorized by the entity to respond to the auditor or examiner on behalf of the entity being audited, reviewed, or examined with respect to specified elements of the entity’s financial audit, financial review, or financial examination that are based on actuarial considerations. Any given financial audit, financial review, or financial examination may involve one or more responding actuaries.

ASOP 21 | §2.11 | REVIEWING ACTUARY

An actuary designated by the auditor or examiner to assist with the financial audit, financial review, or financial examination with respect to specified elements of the financial audit, financial review, or financial examination that are based on actuarial considerations. Any given financial audit, financial review, or financial examination may involve one or more reviewing actuaries.