|SSAE 16 | Why a New Standard?||| Print ||
Statement on Standards for Attestation Engagements (SSAE) No. 16 came about for a number of fundamental reasons, one of the most important being that of SSAE 16 to closely mirror and align itself with ISAE 3402, the globally accepted standard for reporting on controls at service organizations. The regulatory landscape has changed dramatically in recent years, forcing many service organizations to undergo an examination of their control environment. As such, Statement on Auditing Standards No. 70 (SAS 70), the U.S. standard for reporting on controls at service organizations, was well positioned to accommodate the needs of businesses for compliance reporting purposes, ultimately allowing it to play a dominant role, both regionally and internationally. However, its limitations forced changes, resulting in the issuance of SSAE 16, which effectively supersedes SAS 70 on or after June, 15, 2011.
Many of challenges facing SAS 70 that ultimately resulted in the formation of the new SSAE 16 attest standard include the following:
Global Accounting Standards
Service Organization Reporting Requirements
As a result, SSAE 16 now provides additional information for which intended users of this report can have greater confidence in the reporting of controls at service organizations. Specifically, SSAE 16 requires an in-depth description of the service organization’s "system" along with a written assertion by management. The written assertion was never required by SAS 70 and the description of the service organization’s system now requires management to place a greater emphasis on describing and documenting this system for the service auditor for purposes of SSAE 16 reporting.
In short, SSAE 16 closely mirrors ISAE 3402, and in doing so, allows the U.S. standard to be well-positioned for effectively meeting the growing needs of reporting on controls at service organizations. Furthermore, SSAE 16 effectively removes any limitations that were starting to show with SAS 70.
Look upon the emergence of SSAE 16 and ISAE 3402 as a collaborative effort between two standards that greatly seek to bring about transparency and a high degree of consistency for reporting on controls at service organizations.
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