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Accounting Firm Releases Guide to SSAE No. 16

An accounting group recently released a guideline for Statement on Standards f

Statement on Standards for Attestation Engagements (SSAE) No. 16, Reporting on Controls at Service Organizations, was officially implemented in June of 2011, and since then it has changed the way some businesses evaluate their payroll providers, cloud-based IT service providers and other third-party servicers. Recently, NDB Accountants & Consultants highlighted some of the top things audit firms, service organizations and others need to know about the standard.

International scope: SSAE 16 was, in part, implemented to help bring U.S. standards more in line with international standards, according to NDB. The International Standard on Assurance Engagements (ISAE) 3402 is remarkably similar to SSAE 16, and reflects the American Institute of CPAs' belief that accounting standards the world over are moving toward convergence. The previous rule governing these kinds of reports, Statement on Auditing Standards (SAS) 70, was simply not sufficient to keep up with this trend.

Greater detail: According to NDB, the new standard calls for a more detailed description of a "system" than SAS 70. Not only does SSAE 16 demand a more comprehensive report, it requires a written statement of assertion from management. SSAE 16 also allows for an internal audit function, which allows for the personnel within a service organization to perform the duties of an internal auditor.