Page 216 - CA Final Audit Titanium Full Book. (With Cover Pages)
P. 216
CA Ravi Taori
• Does not include controls unrelated to the control objectives in the service organization’s system description,
such as controls related to the service organization’s own financial statements.
User Auditor and Service Auditor
User Auditor Defined:
• User auditor is an auditor who audits and provides reports on the financial statements of a user entity.
Service Auditor Defined:
• Service auditor is a professional accountant in public practice who provides an assurance report on controls at
a service organization, upon the organization's request.
Objectives of Service Auditor in Accordance with SAE 3402
To obtain reasonable assurance about whether, in all material respects, based on suitable criteria
1A. Fairness:
(i) The service organization’s description of its system fairly presents the system as designed and implemented
throughout the specified period (or in the case of a type 1 report, as at a specified date)
1B. Suitability:
(ii) The controls related to the control objectives stated in the service organization’s description of its system were
suitably designed throughout the specified period (or in the case of a type 1 report, as at a specified date)
1C. Effectiveness:
(iii) Where included in the scope of the engagement, the controls operated effectively to provide reasonable
assurance that the control objectives stated in the service organization’s description of its system were achieved
throughout the specified period.
2. Report on Findings:
(b) To report on the matters in (a) above in accordance with the service auditor’s findings.
(CNO 3402.040) Type 1 Report & Type 2 Report
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.
www.auditguru.in 11.8