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Old 10-09-2017, 05:34 PM
DiscreteAndDiscreet DiscreteAndDiscreet is offline
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So imagine you find an error in an actuarial calculation that has been repeated for the past 10 years. Also imagine that over that entire period, changes in results were reviewed by a responsible actuary and an explanation was found for material changes in results. There are three different ways both of these things can happen at the same time: (1) the responsible actuary botched the analysis of changes, (2) the error is an accumulation of individually immaterial errors, or (3) there has been one or more opposing errors that masked the effect.

Numbers 1 and 2 need to be corrected and disclosed to the client/regulator once they are known. Number 3 is not necessarily even an error. Implicitly, the assumptions, methods, and data have been reasonable in aggregate and new review has identified that a particular detail is not reasonable individually, but that should trigger additional review of other items.

Now that said, are you withholding material information from a client or regulator? Are you managing results in a manner that is prohibited? Are you failing to review results in a manner that satisfies the relevant ASOPs? Badically, are you actively hiding anything?

If you are hiding anything material, it should be very easy to demonstrate this to an outside party. Show that the hidden item is not documented in a disclosure or that what you are doing is different from what you've documented. Show that the restated results after adjusting for the issue are materially different.
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