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mso_2006

ياريت لو حد يعرف حاجة عن موضوع sas 70

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السلام عليكم

SAS 70 Overview

Statement on Auditing Standards (SAS) No. 70, Service Organizations, is a widely recognized auditing standard developed by the American Institute of Certified Public Accountants (AICPA). A service auditor's examination performed in accordance with SAS No. 70 ("SAS 70 Audit") is widely recognized, because it represents that a service organization has been through an in-depth audit of their control objectives and control activities, which often include controls over information technology and related processes. In today's global economy, service organizations or service providers must demonstrate that they have adequate controls and safeguards when they host or process data belonging to their customers. In addition, the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 make SAS 70 audit reports even more important to the process of reporting on the effectiveness of internal control over financial reporting. SAS No. 70 is the authoritative guidance that allows service organizations to disclose their control activities and processes to their customers and their customers' auditors in a uniform reporting format. The issuance of a service auditor's report prepared in accordance with SAS No. 70 signifies that a service organization has had its control objectives and control activities examined by an independent accounting and auditing firm. The service auditor's report, which includes the service auditor's opinion, is issued to the service organization at the conclusion of a SAS 70 examination.

SAS No. 70 provides guidance to enable an independent auditor ("service auditor") to issue an opinion on a service organization's description of controls through a Service Auditor's Report (see below). SAS 70 does not specify a pre-determined set of control objectives or control activities that service organizations must achieve. Service auditors are required to follow the AICPA's standards for fieldwork, quality control, and reporting. A SAS 70 Audit is not a "checklist" audit.

SAS No. 70 is generally applicable when an independent auditor ("user auditor") is planning the financial statement audit of an entity ("user organization") that obtains services from another organization ("service organization"). Service organizations that impact a user organization's system of internal controls could be application service providers, bank trust departments, claims processing centers, data centers, third party administrators, or other data processing service bureaus.

In an audit of a user organization's financial statements, the user auditor obtains an understanding of the entity's internal control sufficient to plan the audit as required in SAS No. 55, Consideration of Internal Control in a Financial Statement Audit. Identifying and evaluating relevant controls is generally an important step in the user auditor's overall approach. If a service organization provides transaction processing, data hosting, IT infrastructure or other data processing services to the user organization, the user auditor may need to gain an understanding of the controls at the service organization in order to properly plan the audit and evaluate control risk.

Service Auditor's Reports

One of the most effective ways a service organization can communicate information about its controls is through a Service Auditor's Report. There are two types of Service Auditor's Reports: Type I and Type II.

A Type I report describes the service organization's description of controls at a specific point in time (e.g. June 30, 2003). A Type II report not only includes the service organization's description of controls, but also includes detailed testing of the service organization's controls over a minimum six month period (e.g. January 1, 2003 to June 30, 2003). The contents of each type of report is described in the following table:

Report Contents Type I Report Type II Report 1. Independent service auditor's report (i.e. opinion). Included Included 2. Service organization's description of controls. Included Included 3. Information provided by the independent service auditor; includes a description of the service auditor's tests of operating effectiveness and the results of those tests. Optional Included 4. Other information provided by the service organization (e.g. glossary of terms). Optional Optional In a Type I report, the service auditor will express an opinion on (1) whether the service organization's description of its controls presents fairly, in all material respects, the relevant aspects of the service organization's controls that had been placed in operation as of a specific date, and (2) whether the controls were suitably designed to achieve specified control objectives.

In a Type II report, the service auditor will express an opinion on the same items noted above in a Type I report, and (3) whether the controls that were tested were operating with sufficient effectiveness to provide reasonable, but not absolute, assurance that the control objectives were achieved during the period specified.

Benefits to the Service Organization

Service organizations receive significant value from having a SAS 70 engagement performed. A Service Auditor's Report with an unqualified opinion that is issued by an Independent Accounting Firm differentiates the service organization from its peers by demonstrating the establishment of effectively designed control objectives and control activities. A Service Auditor's Report also helps a service organization build trust with its user organizations (i.e. customers).

Without a current Service Auditor's Report, a service organization may have to entertain multiple audit requests from its customers and their respective auditors. Multiple visits from user auditors can place a strain on the service organization's resources. A Service Auditor's Report ensures that all user organizations and their auditors have access to the same information and in many cases this will satisfy the user auditor's requirements.

SAS 70 engagements are generally performed by control oriented professionals who have experience in accounting, auditing, and information security. A SAS 70 engagement allows a service organization to have its control policies and procedures evaluated and tested (in the case of a Type II engagement) by an independent party. Very often this process results in the identification of opportunities for improvements in many operational areas.

Benefits to the User Organization

User organizations that obtain a Service Auditor's Report from their service organization(s) receive valuable information regarding the service organization's controls and the effectiveness of those controls. The user organization receives a detailed description of the service organization's controls and an independent assessment of whether the controls were placed in operation, suitably designed, and operating effectively (in the case of a Type II report).

User organizations should provide a Service Auditor's Report to their auditors. This will greatly assist the user auditor in planning the audit of the user organization's financial statements. Without a Service Auditor's Report, the user organization would likely have to incur additional costs in sending their auditors to the service organization to perform their procedures.


kamal Gawesh

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