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

 

Where to find June’s flipbook issue

The Journal of Accountancy is now completely digital. 

 

 

 

SPONSORED REPORT

Better decision-making with data analytics

Data analytics has become a hot topic, but many organizations have not yet managed to understand its potential, let alone put it to work. This report will take a deep-dive on how to best introduce or enhance the use of data in decision-making.