While auditing the accounts of insurance company which steps should be taken by the auditor

Following steps should be taken by the auditor while auditing the accounts of insurance company:

1. Internal Check Inspection :-
Generally internal check system insurance company is well organized that the bank. But auditor should examine the details of the internal check system.

2. Verify The Premium :-
Auditor should vouch the premium received with the insurance policy register. He should check the total outstanding premium from the books also.

3. Inspect The Claim Register :-
Auditor should compare the amount of claim with the claim register. He should also check the policies cancelled with the documentary evidences.

4. Cash Balances :-
Auditor should check the cash balances relating to the loans of the company. He should also verify the interest earned.

5. Examine The Final Accounts :-
Auditor should examine that the final activities of the insurance company have been prepared according the insurance act or not?

6. Verify The Payable Commission :-
Auditor should vouch the commission payable to agents. He should verify that this commission does not exceed the rates prescribed in the insurance act.

7. Examine The Investment :-
Auditor should examine all the investment made by the insurance company. Valuation of investment should also be checked.

8. Insurance Act 1938 Application :-
Auditor should also examine that all that prescribed legal requirements have been complied by the insurance company.

9. Checking Of Bonus :-
Auditor should vouch the bonus paid in the bonus register and agency register on closing balance.

10. Provision Of Depreciation :-
Auditor should also verify that sufficient depreciation is provided.

11. Examine Insurance Policies :-
Auditor should inspect the accounts re insured. He should also note the amount of reserves relating to the company loan.

12. Accrued Interest Checking :-
Auditor should verify the receipts interest, dividends and rent. He should of reserves relating to the company loans.

13. Allocation Of Surplus :-
Auditor should see that surplus is proper allocated to the shareholders policy holders.

14. Expenses Allocation :-
Auditor should examine that the management expenses are allocated correctly between the various accounts.

15. Deposits In State Bank :-
Auditor should also verify that the required amount is deposited in the state bank or not?

16. Balances Of Agency :-
Auditor should verify the balances of agency and branch to see that they are all recoverable.

17. Loans Against Policy :-
Auditor should verify those loans advanced to the policy holders against their policies. He should check the receipts and see that they are within the surrender value policy.