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SAS No. 70 – Basics

The Statement on Auditing Standards (SAS) No. 70 or as it usually called SAS-70. SAS No. 70 is the set of guidelines which guides the service organizations on how to disclose their control processes, activities and objectives to their customer’s auditors and their customers in a uniform and standardized reporting format. The service auditor's report which needs to be prepared as per the standards set out in SAS-70 implies that a service organization has got its control activities and objectives duly examined by an independent auditor or auditing firm. The service auditor's report which must include the service auditor's opinion is normally issued to the organization at the time of conclusion of an audit as per requirement of SAS-70 examination.

Who is the ‘Service Auditor’ under SAS-70? The standards provide guidelines which enable an independent auditor to conduct and audit and issue his report and opinion on the control procedures, activities and objective of control practiced in the service organization. This independent auditor has been referred to as the ‘service auditor’ under the SAS-70. The standards and the guide lines do not provide for any pre-determined set of controls to be implements or any control objective which the organization is supposed to implement and achieve bur are as set of guidelines how and what disclosures are required to be made in the auditors report. Service Auditors must follow the AIPCA’s normal fieldwork standards of quality control and reporting while conducting audit under SAS-70. A SAS-70 audit is a reporting framework and not a checklist audit.
When is the SAS-70 report required? When a customer (‘user organization’) of the service organizations is being audited by an independent auditor referred to as ‘user auditor’ , the user auditor requires the service organization to provide a report on their internal control under SAS-70 issued by the service Auditor.

Article Source: http://www.e-learnet.org

Frances Lewis also writes for System Disk on topics such as iPhone: What to Love, What to Hate and Playstation Portable 2 Visit SAS No. 70 – Basics.

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