Actuarial assumptions
Actuarial assumptions are inputs used to estimate uncertain future outcomes, such as mortality, employee turnover, inflation, salary growth and discount rates. Their suitability depends on the specific measurement and reporting framework. The auditor evaluates relevant methods, assumptions and data, and may consider the work of a management or auditor expert.
Worked example
A pension actuary estimates a defined benefit obligation using assumptions about mortality and discount rates; the auditor evaluates the methods and assumptions in context.
Common mistake
Do not treat an actuary’s involvement as proof that all assumptions are reasonable or that the estimate requires no audit work.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Supporting | September 2026–June 2027 |