06.12.11 SAS 70 replaced with SSAE 16: Independent Auditing Change
There has been an important change concerning independent auditing within our industry. activpayroll has conducted an independent Statement on Auditing Standards No. 70 (SAS 70) Type II audit since 2006; this level of audit has been the recognised quality assurance mark for payroll service providers for many years. It has recently been replaced by a new quality benchmark, Statement on Standards for Attestation Engagements No. 16 (SSAE 16).
Why change?
The American Institute of Certified Public Accountants (AICPA) has replaced SAS 70 with SSAE 16, to comply with rigorous international standards.
This change ensures that the American standard complies with the new global standard for international service organisation reporting: International Standard on Assurance Engagements No. 3402 (ISAE 3402), as defined by the International Federation of Accountants.
Acronyms:
SAS 70: Statement on Auditing Standards No. 70
SSAE 16: Statement on Standards for Attestation Engagements No. 16
ISAE 3402: International Standard on Assurance Engagements No. 3402
What is activpayroll doing?
activpayroll is currently undergoing a new independent examination to replace our SAS 70 audit with the new SSAE 16 examination. Additionally, as we operate in more than 70 countries around the world, activpayroll is also being examined for the new global standard, ISAE 3402.
On an annual basis from 2006, activpayroll has been audited based on the SAS 70 Type II standard, which is more comprehensive than Type I because it incorporates the independent auditor's judgment on how controls functioned during a defined twelve-month examination period, as opposed to a singular day, in the case of Type I. activpayroll continues to be assessed for Type II, the most comprehensive examination available.
Alison Sellar, Managing Director of activpayroll, said, “We’ve invested in achieving the comprehensive SAS 70 Type II audits for the past five years, with great feedback from our clients. The new change to SSAE 16 raises the benchmark to comply with international standards. We’re pleased to be working with the independent auditors to achieve this new standard, and expand our horizons to achieve the global ISAE 3402 standard. We take pride in the quality of service we provide our clients with, and are committed to providing our stakeholders with the independent assurance they need to work with us.”
What is SSAE 16?
The new service organisation reporting standard, SSAE 16, replaces SAS 70 and complies with the international standards defined by the International Federation of Accountants, in ISAE 3402. There are additional requirements to achieve a successful SSAE 16 examination, making it more comprehensive than SAS 70.
What is ISAE 3402?
ISAE 3402, reports on the controls within a service organisation. The International Auditing and Assurance Standards Board (IAASB), a branch of the International Federation of Accountants (IFAC), defined the audit standard. ISAE 3402 was developed to provide an international assurance standard to allow certified public accountants to issue a report about the controls within a service organisation that are likely to impact, or be part of their clients system of internal control over financial reporting. The service organisations clients and their auditors can use the independent report to analyse the service organisations ability to perform, against an international standard.
ISAE 3402 provides a global assurance standard for reporting on controls within a service organisation.
Why are independent audits useful?
If your service provider has an SSAE 16 examination performed, as a client you can obtain a report about the service provider that will provide valuable information regarding their controls; whether the controls are in operation, suitably designed, and operating effectively. This provides you with reassurance that a service provider is capable of supporting your requirements.
You can download a copy of this information by clicking here.
For more information, or assistance please contact:
Sian Odgers
Business Services Director
T: +44 (0) 1224 860 800
F: +44 (0) 1224 860 810
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