Page 238 - CA Final PARAM Digital Book.
P. 238
Part 2 SA 3402
QNO Assurance Report on Controls at Service Organisation New Course – (SM23)
3402.100 TITANIUM CNO -- 3402.040
Ayurda Ltd.is a fast-growing and award-winning SaaS software company which is headquartered in
Mumbai. It also has offices in the UK and provides cloud-based professional services automation (PSA)
software solutions to professional services organizations around the world. They want to engage you to
provide an assurance report for one of its major clients over the controls it operates as a service
organisation. Can you provide such an assurance report?
Auditor can issue following Type 1 / Type Assurance reports under SAE 3402.
Type 1 report is a report that comprises:
1. The service organization’s description of its system.
2. A written assertion by the service organization that, in all material respects, and based on suitable
criteria:
2A. Fairness: The description fairly presents the service organization’s system as designed and
implemented at the specified date.
2B. Suitability: The controls related to the control objectives stated in the service organization’s
description of its system were suitably designed as at the specified date.
3. Report on Findings: A service auditor’s assurance report that conveys reasonable assurance about the
matters referred to in
Type 2 report is a report that comprises:
1. The service organization’s description of its system
2. A written assertion by the service organization that, in all material respects, and based on suitable
criteria:
2A. Fairness: The description fairly presents the service organization’s system as designed and
implemented throughout the specified period.
2B. Suitability: The controls related to the control objectives stated in the service organization’s
description of its system were suitably designed throughout the specified period and
2C. Effectiveness: The controls related to the control objectives stated in the service organization’s
description of its system operated effectively throughout the specified period and
3. Report on Findings: A service auditor’s assurance report that Conveys reasonable assurance about the
matters discussed above and includes a description of the tests of controls and the results thereof.
Type 1 V/s Type 2
Type 1 Report Description: Type 1 report is a report on the description and design of controls at a service
organization.
Type 2 Report Description: Whereas type 2 report is a report on the description, design and operating
effectiveness of controls at a service organization.
QNO Report on Design & Operating Effectiveness of Controls New Course – (SM23)
3402.200 TITANIUM CNO -- 3402.040
Bansi Group is a leading institution running prestigious post graduate courses in the field of management.
Its financial statements are audited by an independent auditor. Before the start of this academic session,
the Board of the institution had outsourced its entire process of inviting student applications, submission
of applications, and collection of application fees including late fees and such matters to Easy Solutions
Limited.
The auditors of Bansi Group want to be sure about the design and operating effectiveness of controls at
Easy Solutions Limited. What should be the nature of the report to be provided by auditors of Easy
Solutions Limited specifically for use by Bansi Group and its auditors in this regard in terms of SA 3402?
www.auditguru.in PARAM 11.2 | P a g e