Summary
Specifically, SAS 70 covers audits of the internal controls at a "service organization." It was developed in response to a significant market shift toward data process outsourcing. Auditors discovered that a significant portion of the internal control structure over the preparation of financial statements was now in the hands of these outsourced data centers (service organizations). Prior to SAS 70, these service organizations found themselves with a "revolving door" of auditors needing to assess their internal controls.
SAS 70 was created to eliminate this revolving door. One auditing firm could now audit the internal controls and all of the auditors for the service organization's customers could rely on that audit. This "single audit" concept is what has found favor with those trying to comply with modern governance rules. What was once a report used primarily to convey information from audit firm to audit firm is now a report used just as often by customers of service organizations.Obviously, a significant compliance hurdle is cleared. A SAS 70 audit, applied correctly, can provide compliance evidence for SOX, bank regulators, HIPAA and more. A SAS 70 audit can also be used to differentiate your organization in the marketplace by letting potential customers know that you are serious about sound internal controls and business practices. Finally, a SAS 70 audit can have extremely positive effects on your overall culture of control. The improved internal control structure will result in minimized risk of error, irregularities and fraud.See the full content of this document
Extract
Analyzing the Audit
The post-Enron outcry for more sound business governance practices has cast a wide net. For collection agencies, it has resulted in pressure to obtain a SAS 70 audit. If you have not yet seen a request for a SAS 70 audit in a client request for proposal, chances are you will be seeing it soon.
The pressure to obtain a SAS 70 audit has come from three primary sources. First, section 404 of...See the full content of this document
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