Questions and Answers
How does the work of an auditor affect me?
Auditors confirm that companies’ annual reports and accounts give an accurate view of their affairs and how they are run. This information helps shareholders decide to invest in companies and indicates if companies are viable. Successful companies provide jobs, contribute to economic growth and help to create prosperity in the UK.
How does the work of an accountant affect me?
Accountants handle financial transactions for a company and ensure the accuracy of financial information, which is critical to give shareholders confidence and for enabling staff to do their jobs and be paid.
How does the work of an actuary affect me?
Actuaries help insurers decide how much to charge you as insurance premiums and how much money those insurers should hold to be able to pay your claims when they arise. Actuaries help pension funds to hold enough money to pay your pensions when you retire, to decide what assets are the right type to invest in, how those assets should be managed and how much you and your employers should pay in order to build up a fund that meets your needs in retirement. What typifies the work of an actuary is:
Building models that project a financial future
Making sure that all the different parts can be fairly compared
Estimating and managing the risks going forward
Allowing for the impact of timing
Making sure that assumptions are made explicit and that they look reasonable compared to what has happened in the past and what we expect in the future.
In what ways does business help UK society?
Companies stimulate the economy and create employment. They also help society tackle some of its greatest challenges such as poverty, disease and illiteracy.
I own shares in a company, what aspects of the FRC’s work should I focus on?
All of the FRC’s work is relevant to you. We specify and monitor what companies need to report on and how their accounts should be checked for accuracy. We also set out good practice for how companies are run. All of this means the risk you take in owning shares in companies is understood better.
I am saving in a pension scheme, what aspects of the FRC’s work should I focus on?
Each year you receive an illustration showing how much pension you might get from your pension schemes when you retire. These illustrations make assumptions about future experience. At the FRC we are responsible in the background for ensuring that the companies making these projections have used assumptions that are in line with what is required so that the answers are in a reasonable ballpark.
More generally we set standards that actuaries have to work to. These standards are designed to protect your interests – to make sure that you can understand what actuaries have done, what they have assumed in their models and that they have given you enough information so that you can make a good decision.