Final answer:
It is generally not allowable for an entity to provide actuarial services related to material liabilities and also perform the audit for a Public Client due to independence concerns and potential conflicts of interest which may impair audit objectivity.
Step-by-step explanation:
The question pertains to whether it is allowable for an entity to provide actuarial services related to certain liabilities and also perform the audit when these liabilities are material to the financial statements. In the context of a Public Client, such arrangements could raise independence concerns.
In general, providing actuarial services to a client and then auditing one's work can impair the perception of independence which is crucial for the integrity of the audit. This is because the auditor might become too sympathetic to the client's interests or too involved in the creation of the financial statements being audited.
The regulations regarding such scenarios can vary by region, but often, professional standards and ethics rules set by organizations like the American Institute of Certified Public Accountants (AICPA) in the United States, make a clear distinction to protect the audit's independence.
Therefore, providing actuarial services and then performing an audit for a Public Client where these services are material to the financial statements would generally be viewed as not allowable, due to potential conflicts of interest and the risk of compromised audit objectivity.