IAASB Releases Outsourcing Service Standard

The International Auditing and Assurance Standards Board has released a new assurance standard on controls at service organizations such as international outsourcers.

International Standard on Assurance Engagements 3402, Assurance Reports on Controls at a Service Organization, addresses reports on the description, design, and operating effectiveness of controls relating to the broad range of services that today’s service organizations provide. Such services can range from assisting with processing transactions to performing one or more business functions.

“A single service provided by a service organization can have direct relevance to the quality of financial reports prepared by entities around the globe. Effective controls for delivering the service are therefore essential,” said IAASB Chair Arnold Schilder in a statement. “This new standard sets a global benchmark for reporting on controls at a service organization, thereby helping to fulfill the needs of those who use such services and their auditors under International Standards on Auditing.”

ISAE 3402 is effective for service auditors’ reports covering periods ending on or after June 15, 2011. An overview of this new standard is available in the IAASB section of the new Publications and Resources site.