Page 53 - Quick Insights Book 2022

12 Insurance Companies

INSURANCE SECTOR

Chartered Accountants can provide their services to
Insurance enterprises in the field of risk management,
insurance management, insurance fund management, insurance
marketing, underwriting management, claims management,
loss adjustment, re-insurance, product development, actuarial
science and many allied areas such as:

STATUTORY AUDIT

Section 12 of the Insurance Act, 1938 provides that the financial
statements of every insurer are required to be audited annually
by an auditor unless they are subject to audit under the Indian
Companies Act.

Insurance companies have been advised to have two audit
firms on joint audit for their Statutory Audit. IRDA has further
stipulated guidelines on appointment of auditors based on the
experience of the firms/partners

INTERNAL AUDIT
In the current scenario, insurance market in India has witnessed
dynamic changes including entry of a number of global insurers.
Most of the private insurance companies are joint venturing with
recognized foreign institutions across the globe. Saturation of
markets in many developed economies has made the Indian
market even more attractive for global insurance majors.
The Insurance Regulatory and Development Authority (IRDA)
regulate and develop the insurance sector in India through
calibrated policy initiatives, helps to improve disclosures. The
role and importance of internal control systems in good risk
management practice, with a particular emphasis on the internal
audit and compliance functions within such a framework has
become necessary. Introduction of mandatory quarterly internal
audit for insurer is one such step taken by the Insurance Insurance
Regulatory and Development Authority which would contribute
towards strengthening controls and also reducing risks under
volatile market conditions. Companies

Internal audit is core competence area of chartered
accountants. It is an important assignment being undertaken
both by practising members of the Institute as well as those
in industry. This demands the internal auditor to have requisite
skills and high level of knowledge of the sector as well as its
interrelationship with variables in its operating environment.

TAX AUDIT

The insurance companies are liable to tax audit under
section44AB of the Income Tax Act,1961. Chartered
Accountants being experts in the areas of auditing and with

40 Quick Insights on Professional Opportunities for Chartered Accountants