The International Auditing and Assurance Standards Board has proposed two new standards focusing on enhancing auditors’ consideration of controls at service organizations, along with a third standard that addresses the communication of deficiencies in internal control to those charged with governance.
The proposed International Standard on Auditing (ISA) 402 (Revised and Redrafted), "Audit Considerations Relating to an Entity Using a Third Party Service Organization," deals with the auditor’s responsibilities to obtain audit evidence when a client uses one or more service organizations.
The proposed International Standard on Assurance Engagements (ISAE) 3402, "Assurance Reports on Controls at a Third Party Service Organization," is expected to help bring consistency in reporting on controls at service organizations. In particular, it should ensure that reports issued in one country are likely to meet the requirements of the auditors in other countries.
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