The Relationship Between Audit Services and Non-Audit Actuarial Services in the Auditor’s Report




Audit services, Non-audit services, Actuarial, Insurance industry


Purpose: In view of the trend toward using international financial reporting standards when generating financial statements, we looked at the interaction between audit services and non-audit services for auditors in the context of actuarial services for insurance firms. CPAs are authorized to work in banks and insurance businesses, but those with a practicing license obtained after earning a higher academic degree are not.

Design/methodology/approach: A small number of auditing firms control the decisions issued by the Iraqi Accountants Association, monopolizing audit services in banks and insurance businesses. In the case of actuarial services used in reserve estimation, they are credited to an external party's account without any verification of the Reliability of the reserve estimation procedure.

Originality/value: In addition to audit services, a scale has been developed to examine the auditors' non-audit actuarial services. The financial reporting rules for insurance contracts 17 and the examinations for acquiring an actuarial certificate in the United States of America are used to create this scale.

Findings: The findings show that there is no substantial relationship between the two services supplied, and we recommend that the actuarial services be audited by specialist international companies that support the auditors' judgment on the computation of expected reserves in the financial accounts. Conducting specialist courses in the actuarial profession, and obtaining this credential is a requirement for auditing insurance companies.


Download data is not yet available.


Adams, M., & Jiang, W. (2020). Do financial experts on the board matter? An Empirical test from the United Kingdom’s non-life insurance industry. Journal of Accounting, Auditing & Finance, 35(1), 168-195.

Al-Taie, B.F.K., Flayyih, H.H., Talab, H.R. (2017). Measurement of income smoothing and its effect on accounting conservatism: An empirical study of listed companies in the iraqi stock exchange. International Journal of Economic Perspectives, 2017, 11(3), pp. 710–719

Alzabari, S.A.H., Talab, H.R., Flayyih, H.H. (2019). The effect of internal training and auditing of auditors on supply chain management: An empirical study in listed companies of Iraqi stock exchange for the period 2012-2015. International Journal of Supply Chain Management, (5), pp. 1070–1075.

Ashbaugh, H., LaFond, R., & Mayhew, B. W. (2003). Do nonaudit services compromise auditor independence? Further evidence. The accounting review, 78(3), 611-639.‏

Benyoussef, S., & Hemrit, W. (2019). Measuring the relative efficiency of insurance companies in Saudi Arabia: The case study of Takaful vs cooperative industries. Cogent Economics & Finance, 7(1), 1590818.

Canning, M., & Gwilliam, D. (1999). Non-audit services and auditor independence: some evidence from Ireland. European accounting review, 8(3), 401-419.‏

Daykin, C. D. (1999). The regulatory role of the actuary. British Actuarial Journal, 5(3), 529-574.

Fateh, T., (2015). Accounting for insurance companies under international accounting standards

Finan, M. B. (2007). A Probability Course for the Actuaries A Preparation for Exam P. Arkansas Tech University.‏

Flayyih, H. H., Mohammed, Y. N., & Talab, H. R. (2019). The role of accounting information in reducing the funding constraints of small and medium enterprises in Iraq. African Journal of Hospitality, Tourism and Leisure, 8(4), 1-10.‏

Gaver, J. J., & Paterson, J. S. (2014). The association between actuarial services and audit quality. Auditing: A Journal of Practice & Theory, 33(1), 139-159.

Grace, M. F., & Leverty, J. T. (2011, July). Full information reserve errors and their relation to auditor and actuary quality. In ARIA 2011 Anual Meeting.

Handoyo, F., Riaman, R., Gusriani, N., Supian, S., & Subiyanto, S. (2019). Joint Life Term Insurance Reserves Use the Retrospective Method Based on De Moivre Law. World Scientific News, 128(2), 315-327.

IAA. (2013). International standard of actuarial practice 2–Financial analysis of social security programs.‏

IFRS, N. (2017). Insurance contracts.‏

Jamil, R. N. (2016). Actuarial accounting and its role in maximizing the value of the Economic Unit. Tikrit Journal of Administration and Economics Sciences. Volume: 12 Edition: 35 Pages: 148-165

Jenkins, J. G., & Krawczyk, K. (2000). The relationship between nonaudit services and perceived auditor independence. North Carolina State University.

Jenkins, J. G., & Krawczyk, K. (2001). The influence of nonaudit services on perceptions of auditor independence. Journal of Applied Business Research (JABR), 17(3).

Jum'a M. A. & Omar M. S. (2019). The role of contemporary actuarial communication and the states of Oman, and the Moroccan countries, Arab Journal of Management, Vol. 39, No. 2.

Kamiya, S., Sen, A. Z., Yung, G. C., & Thong, L. W. (2013). The Managerial Role of Actuarial Professionals on Insurer’s Risk-Taking.

Khan, U., Ryan, S. G., & Varma, A. (2019). Fair value versus amortized cost measurement and the timeliness of other-than-temporary impairments: Evidence from the insurance industry. The Accounting Review, 94(6), 285-307.

Kinney Jr, W. R., Palmrose, Z. V., & Scholz, S. (2004). Auditor independence, non‐audit services, and restatements: Was the US government right?. Journal of Accounting Research, 42(3), 561-588.

Klumpes, P., Komarev, I., & Eleftheriou, K. (2016). The pricing of audit and non-audit services in a regulated environment: a longitudinal study of the UK life insurance industry. Accounting and Business Research, 46(3), 278-302.

Krishnan, J., Su, L., & Zhang, Y. (2011). Nonaudit services and earnings management in the pre-SOX and post-SOX eras. Auditing: A Journal of Practice & Theory, 30(3), 103-123.‏

Menzietti, M., & Pirra, M. (2017). Risk Factor Contributions and Capital Allocation in Life Insurance in the Solvency II Framework. In Insurance Regulation in the European Union (pp. 245-260). Palgrave Macmillan, Cham.

Parrish, A. M. (2011). What is an Actuary?.‏

Pike, J. E. (2003). Audit Quality and the Provision of Non-Audit Services: Evidence from the Property Casualty Insurance Industry. Working Paper. University of Wisconsin.

Rahman, J. M. (2017). Prohibition of Non-Audit Services and Its Impact on the Competition Between Local Auditing Firms and Big-4-Affiliated Audit Firms in Bangladesh. Asian Journal of Business Studies, 6(1), 01-05.

Saleh, B. S. (2020). IFRS 17 Presentation "Accounting Treatment". July.

Sukhorukova, I. V., & Chistyakova, N. A. (2018). Leadership in Providing Personal Life Insurance Services as a Way to Increase the Sustainability of the Insurance Company’s Business. In Leadership for the Future Sustainable Development of Business and Education (pp. 249-257). Springer, Cham.

Talab, H.R., Hasan, S.I., Flayyih, H.H., Hussein, N.A. (2017). Analysis of mental accounting: A case study of listed companies in Iraqi stock exchange. International Journal of Economic Perspectives, 2017, 11(4), pp. 684–699.

Thijeel, A.M., Flayyih, H.H., Talab, H.R. (2018). The relationship between audit quality and accounting conservatism in the Iraqi banks | La relación entre la calidad de la auditoría y el conservadurismo contable en los bancos Iraquíes. Opcion, 34(Special Issue 15), pp. 1564–1592.

Tripp, M. H., Chan, C., Haria, S., Hilary, N., Morgan, K., Orros, G. C., & Tahir-Thomson, K. (2008). Enterprise risk management from the general insurance actuarial perspective. British Actuarial Journal, 14(3), 433-525.

Turnbull, C. (2017). British Actuarial Thought in General Insurance (1851–1994). In A History of British Actuarial Thought (pp. 275-309). Palgrave Macmillan, Cham.‏

Von Wielligh, S. P. J. (2006). The incorporation of actuarial expertise in overall audit strategies for listed South African long-term insurers. Meditari: Research Journal of the School of Accounting Sciences, 14(2), 113-130.




How to Cite

Abass, Z. K. ., Flayyih, H. H. ., & Hasan, S. I. . (2022). The Relationship Between Audit Services and Non-Audit Actuarial Services in the Auditor’s Report. International Journal of Professional Business Review, 7(2), e0455.