What's the Difference? SSAE 16 vs. SAS 70


By Holly Russo

In April 2010, the AICPA issued Statement on Standards for Attestation Engagements (SSAE) 16, titled Reporting on Controls at a Service Organization, which supersedes SAS 70. Effective June 15, 2011, all service audit reports must be issued in accordance with SSAE 16.

Audits performed in accordance with SSAE 16 will not be significantly different from the current SAS 70 standard. Key differences include the following:

• Requirement of a “management assertion” section within the report - Under SSAE 16, management of service organizations are required to provide a written assertion in the body of the report about the fair presentation of the description of the service organization’s system, the suitability of the design of the controls and, for Type 2 reports, the operating effectiveness of the controls. If a service organization uses subservice organization(s) and elects to use the inclusive method, the subservice organization(s) assertion must also accompany the auditors’ report. Management’s assertion must also specify the criteria used for its assessment. These assertions are similar in nature to SAS 70 audit management representation letters. A separate management representation letter is also still required.

• For Type II reports, the service auditors’ opinion on fair presentation of the system and suitability of design will be for the period covered by the report. Under SAS 70, this is currently as of a point in time.

While these are the most significant differences, SSAE 16 contains other differences that need to be fully understood by service organizations and service auditors by reviewing the standard in detail. 

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