Buy custom The Collapse of HIH ? Solvency and Audit Risk 
    
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                    Business
                
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                6 / 1412             | 
        
                
    
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HIH also broke the "minimum solvency requirement" imposed by s. 29 of the Insurance Act 1973, which requires that the value of the insurer's assets at all times exceed the amount of its liabilities by not less than the greater of $2 million, 20 per cent of annual premium income, or 15 per cent of outstanding claims provisions...
        
        
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If not, they should not issue the financial reports on a going-concern basis. The directors of HIH did not raise any concerns as to whether the financial reports should be issued on a going-concern basis, which may indicate that the solvency of the company was not properly investigated.
The auditors' main role in determining solvency relates to the appropriateness of management using the going concern basis in the preparation of financial reports ...
        
        
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