Outsourced Accounting Functions Flashcards
How can I order to obtain the required evidence needed via a service company
A contract or service agreement between the audit client and service organisation
User manuals and or technical manuals
Reports by the service organisation
Reports by the service auditor (such as letters highlighting internal control weaknesses)
Knowledge derived from previous dealings with the service organisation
Comparing data submitted to the service company to information and data received back
What further information can auditors obtain evidence for if the initial information is not present
Obtain and assess a type one or type two reports
Ask the service organisation for information
Visit (with commission) the service organisation and carry out audit processes There
Use (with permission) another order to carry out audit procedures at the service company
What are type one and type two reports
ISA 402 audit considerations relating to an entity using a service organisation described two types of reports:
Type one
Description prepared by the management of the service organisation about the service companies control objectives and related controls that have been implemented.
A report prepared by the service auditor giving reasonable assurance on the suitability of the service company systems and control objectives.
Type two
A description prepared by the management of the service organisation about the service companies control objectives and related controls that have been implemented and sometimes a description of the operating effectiveness
A report prepared by the service order to giving reasonable assurance of the suitability of the service company systems and control objectives, the effectiveness of the controls and a description of the service auditors test of the controls and results of those tests
