 - SAS 70 (the Statement on Auditing Standards No. 70) defines the standards an auditor must employ in order to assess the contracted internal controls of a service organization. Service organizations, such as hosted data centers, insurance claims processors, and credit processing companies, provide outsourcing services that affect the operation of the contracting enterprise. The SAS 70 was developed by the American Institute of Certified Public Accountants (AICPA) as a simplification of a set of criteria for auditing standards originally defined in 1988.
Under SAS 70, auditor reports are classified as either Type I or Type II. In a Type I report, the auditor evaluates the efforts of a service organization to prevent accounting inconsistencies, errors, and misrepresentation, and the likelihood that those efforts will produce the desired future results. A Type II report includes the same information as that contained in a Type I report and, in addition, the auditor attempts to determine the extent to which agreed-on controls have been operating effectively between the time they were implemented and the present.
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28 Jun 2005
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