Wiley Practitioner's Guide to GAAS 2015: Covering all SASs, SSAEs, SSARSs, PCAOB Auditing Standards, and Interpretations

AU-C 402 Audit Considerations Relating to an Entity Using a Service Organization

AU-C ORIGINAL PRONOUNCEMENT

Original Pronouncement

Statement on Auditing Standards (SAS) 122.

AU-C 402 contains guidance only for user auditors. Guidance for service auditors is contained in SSAE No. 16 (AT Section 901).

DEFINITIONS OF TERMS

Source: AU-C 402.08

Complementary user entity controls. Controls that management of the service organization, in the design of its service, assumes will be implemented by user entities and which, if necessary to achieve the control objectives stated in management's description of the service organization's system, are identified as such in that description.

Report on management's description of a service organization's system and the suitability of the design of controls (referred to in this section as a type 1 report). A report that comprises the following:

1. Management's description of the service organization's system
2. A written assertion by management of the service organization about whether, in all material respects and based on suitable criteria:
   1. Management's description of the service organization's system fairly presents the service organization's system that was designed and implemented as of a specified date
   2. The controls related to the control objectives stated in management's description of the service organization's system were suitably designed to achieve those control objectives as of the specified date
3. A service auditor's report that ...