Overview
Q1. Explain what is meant by capitalized costs and describe the substantive audit procedures that an auditor may perform to verify the appropriateness of capitalized costs. (5 Marks)(Learning Module 9, Chapter 8)
Note: Provide answers with suitable examples, and they should not be copied from any sources. Answer:
Q2. a) Explain the key financial reporting requirements applicable to Takaful operators. What are the unique disclosures required under Takaful principles? (5 Marks) (Learning Module 10, AAGTO Chapter 3)
Note: Provide answers with suitable examples, and they should not be copied from any sources.
Anwer:
b) From the following information, prepare accounting entries for general takaful products:
Contribution from new participants SAR 10,000
Contribution renewal participants SAR 8,000
Advanced contribution from new participants SAR 5,000
Answer:
Q3. Alpha Company has the following financial data: (5 Marks) (Learning Module 11, AAGTO Chapter 4)
| Particulars | Amounts (SAR) |
| Total Profit for the Year | 320,000 |
| General Takaful Assets (Year 2015) | 620,000 |
| General Takaful Assets (Year 2016) | 650,000 |
| Cash | 200,000 |
| Short-term Investment | 205,000 |
| Short term liabilities | 200,000 |
| Underwriting Surplus Distributable to Participants/Participants' Share of Profit | 235,000 |
| Gross Contribution | 455,000 |
| Net Contribution | 365,000 |
| Wakalah Fee | 105,000 |
| Commission Paid | 90,000 |
| Management Expense | 95,000 |
| Net Claim Incurred | 265,000 |
| Earned Contribution | 340,000 |
Calculate:
- Return on Assets
- Quick Liquidity
- Surplus Distribution Ratio
- Expense Ratio
- Claims Ratio
Answer: