For organisations providing transaction processing for their customers, an ISEA3402 or SSAE16 report including an independent auditor opinion is an effective method of communication that internal controls over systems and processes are suitably designed and are operating effectively within a well-controlled environment. Such formal communication has recently become an important success factor when differentiating between service organisations and demonstrating ability to achieve high quality performance. In addition to ISAE and SSAE reports auditors can issue Agreed Upon Procedures type reports too, a report that is a focused review of controls in a certain area, including non-financial reporting areas.
The concentration on the core business and the increasing cost pressure are the two main factors for the steady rise of outsourced services. Due to increasing national and international requirements (e.g. Sarbanes Oxley Act) outsourcing services gained in importance. In addition the extent and the nature of the outsourced services became more complex.
Service providers of all types, especially those servicing the financial institutions, hosting data centres, providing payroll related services, managing logistic procedures, must demonstrate to their customers and their customers’ stakeholders that they provide complete, accurate, and secure transaction processing in a well controlled environment. Indeed, in many instances, service provider companies are required by their customers to have a third-party examination of their services to provide assurance in connection with financial or internal audits.
Third Party Assurance services provide solutions and opportunities both for service organizations and their current or prospective customers:
We can provide independent process and control assurance:
ISAE3402 vs Agreed Upon Procedures (AUP)
Under International Auditing Standards (IAS) an independent auditor, such as PwC, can issue an assurance report on agreed upon procedures. Such procedures could be tailored to specific users, transactions or controls mostly interested by the users.
This AUP report is commonly chosen by organizations looking for flexibility, cost efficiency orthey outsourced certain business processes and the service organization cannot provide them an ISAE3402 or SSAE16 report.
Statement on Auditing Standards (SAS) No. 70 has long been the most widespread and recognised standard globally for performing such assessments. The requirements and guidance for auditors reporting under SAS 70 will be superseded for reporting periods ending on or after the 15th June 2011 by SSAE 16. However, given both SAS 70 and SSAE 16 are US based standards, and many countries did not have their own standard for performing such assessments, an international standard, ISAE 3402, was issued in December 2009. This new standard will provide a reporting option for service organisations that need a global attestation standard to deliver consistent reporting worldwide.
Leaflets: Third Party Assurance
1. Have you thought about providing a detailed overview or perhaps a regular report to your customers and employees about your company’s sustainable development efforts?
2. If you already prepare such a report, have you thought about having it reviewed it by an independent party to increase data reliability?
3. Would you like to prepare your report in accordance with the Global Reporting Initiative (GRI) guidelines?
Global warming, resource scarcity, demographic changes – these are the most important issues that must be addressed in the near future. The successful introduction of a Corporate Social Responsibility (CSR/CR) policy is of strategic importance for every company. Business success increasingly depends on how genuinely and transparently these responsibilities are addressed, beyond the legal requirements.
Corporate Social Responsibility is an important element of corporate strategy. By taking into consideration the dominant trends and social needs, CSR offers unique opportunities and shows the risks companies must address. PwC has been working with policy makers and companies since 1997, helping to analyse issues and develop practical solutions for our clients.
Sustainability reporting is governed by a number of international standards to ensure a uniform structure for the presentation of sustainability-related information. Most businesses today prepare their sustainability reports in accordance with the GRI guidelines.
How can PwC help?