Important Points for IC 26 - Life Insurance Finance Exam
Page 41 Of 82
Go to:
Managements report has to certify than an internal audit system is in place, which is commensurate with the size of the company.
A liability with respect to pending suits in the courts should be shown as a contingent liability and should be disclosed as a foot note to the balance sheet.
The first step in the reconciliation of bank balances as per books with the bank balances as per bank statement is obtaining a certificate of balances from all the banks having the insurers account. Without this step, the process of reconciliation cannot commence.
It is true that imprest cash system should be followed for small cash balances. Supplementary cash book must be incorporated in the main cash book. Stamp records fall under cash records only.
One of the peculiar features in case of finalizing and verifying the expenses is that the amount of expense should tally with the amount in principal ledger. If it does not tally, there is some error in the accounting procedure.
MODELEXAM® 
www.realsoftinfoplan.com