FAQ Outlines New Service Organization Standards


The AICPA has developed a set of questions and answers to help explain the changes resulting from the recent issuance of Statement on Standards for Attestation Engagements No. 16, Reporting on Controls at a Service Organization, by the AICPA’s Auditing Standards Board.

SSAE No. 16 is applicable when an entity outsources a business task or function to another entity (usually one that specializes in that work) and the data resulting from that task or function is incorporated in the outsourcer’s financial statements.

In SSAE No. 16, an entity that performs a specialized task or function for other entities is known as a service organization and an entity that outsources the task or function to a service organization is known as a user entity. 

Prior to the issuance of SSAE No. 16, the guidance for service auditors reporting on controls at a service organization was contained in Statement on Auditing Standards No. 70, Service Organizations (AICPA, Professional Standards, vol. 1, AU sec. 324), as amended.

More from the JofA:

 

 Find us on Facebook      Follow us on Twitter

 

SPONSORED REPORT

Why cybercriminals are targeting CPAs

This free report expands on the most commonly found scams, why education and specialized IT knowledge help to lessen security vulnerabilities, and why every firm should plan carefully for how it would respond to a breach.

PODCAST

How tax reform — and Excel — are changing the CPA Exam

Mike Decker, the vice president of examinations at the AICPA, discusses changes being made to the exam as a result of tax reform — and about how Excel will now be available for use on the test.