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INDEPENDENT AUDITORS’ REPORT

TO THE PROFESSIONAL INSURANCE BROKERS ASSOCIATION

ON APPLICATION REQUIREMENTS OF THE MEMBERSHIP

We have performed the audit on the accompanying management report (the Managenent Report”) of ABCD Limited (previously known as EFG Limited’) (the "Company”) as at DD MMMM YYYY to confirm that the Paid-up Share Capital shown in the Management report is amounted to HK$500,000 and Net Asset Value shown in the Management report have been maintained by the Company not less than HK$200,000.

Respective responsibilities of management and auditors

You are responsible for preparing the Management report in accordance with the Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA”).

It is our responsibility to form an independent opinion on the Management report based on our engagement. and to report our opinion to you.

Auditors’ responsibility

We conducted our audit in accordance with Hong Kong Standard on Auditing 800 issued by the HKICPA. This Standard requires that we plan and perform the audit to obtain reasonable assurance about whether the Management report is free of material misstatement. An audit includes examining. on a test basis, evidence supporting the amounts and disclosures in the Management report. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall presentation of the Management report. We believe that our audit provides a reasonable basis for our opinion.

Opinion

Based on the foregoing, in our opinion, the Paid-up Share Capital shown in the Management report is amounted to HK$500,000 and Net Asset Value shown in the Management report have been maintained by the Company not less HK$200,000 as at DD MMMM YYYY.

asked by (9k points)

The following examples are extracted from "certification letters" issued by practitioners on engagements involving applicant insurance brokers’ compliance with minimum requirements set by the Insurance Authority.

Example one

"I am the auditor of the above-named company.

According to the information contained in my client's accounting records, I would like to confirm as at [date]:

1. The company has a fully paid up capital of HK$100,000 and has a net worth of not less than HK$100,000..."

Example two

"I hereby certify that the paid up capital and net asset value of the company as at [date] has fulfilled the minimum requirements of HK$100,000..."

Example three

"We are newly appointed as the auditors of the captioned company.

On behalf of our client, we have examined the records of the captioned company and would like to certify and confirm the followings:

1. The company has a fully paid up share capital of at least HK$100,000 and has a net asset value of not Less than HK$100,000..."

Source: HKICPA A Plus [volume December 2017]

5 Answers

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Appendix 1 of PN 810.1 can be used as an audit program checklist for assurance report for Insurance Brokers – Compliance with the Minimum Requirements Specified by the Insurance Authority under Sections 69(2) and 70(2) of the Insurance Ordinance:

Source: http://app1.hkicpa.org.hk/ebook/HKSA_Members_Handbook_Master/volumeIII/pn810_1.pdf

answered by (9k points)
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[Click to go to: GUIDELINE ON MINIMUM REQUIREMENTS FOR INSURANCE BROKERS] - page 11 for Professional Indemnity Insurance / page 12 for Keeping of Separate Client Accounts / page 14 for Keeping Proper Books and Accounts

For "Keeping of separate client accounts", also can refer to solicitors' accounting manual for a more detailed guidance:

http://www.hklawsoc.org.hk/pub_e/admission/LocalLawFirm/pdf/AccountingManual.pdf

answered by (9k points)
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[Technical Article]Insurance brokers: Accounting for premiums receivable from policyholders

Link: http://app1.hkicpa.org.hk/APLUS/2017/06/pdf/48_TechUpdate.pdf

[Source: HKICPA Aplus Volume: June 2017]

answered by (9k points)
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Insurance broker professional bodies' possible practice review checklist:

answered by (9k points)
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Method to get both office account and client account from one bank by one single bank confirmation request and pay bank charge one time only:

answered by (9k points)
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