Transitioning from SAS 70 to SSAE 16
The AICPA recently issued a Statement on Standards for Attestation Engagements No. 16 (SSAE 16), Reporting on Controls at a Service Organization to replace SAS 70 as the standard for reporting on service organization controls. Beginning with reporting periods ending on or after June 15, 2011, with early application allowed, SSAE 16 will replace SAS 70.
Why Will SSAE 16 replace SAS 70?
- International business requires a global standard.
- Improved information for stakeholders.
What Does It Mean for My Company?
SAS 70 report cycles have traditionally ended on June 30. Service organizations will be required to assume the new standard and implement a process of controls for their June 30, 2011 report.
SAS 70 Audits, the AICPA’s acronym for Statement on Auditing Standard No. 70, serve as due diligence for a service organization’s processing of transactions on behalf of another entity. At Feeley and Driscoll, the Auditors in our Boston Accounting Consulting Firm differentiate between the two different SAS 70 report types and perform both Type I (Reports on Controls Placed in Operations) and Type II (Reports on Controls Placed in Operations and Tests of Operating Effectiveness) reports for client service organizations.
The audits and opinions provide our service clients and the user auditors of their clients with information as to whether or not the controls in place at the service center are designed appropriately and operating effectively.
Who is Affected?
Organizations that provide a service that materially impacts the financial statements of both publicly traded and privately held companies may be required by their clients to undergo an audit of their operations.
Examples of such service organizations include but are not limited to: claims processors, data storage, payroll and billing services, web hosting, investment advisors, or market research firms.
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