ISA 402 – Audit consideration relating to an entity using a service organization

 ISA 402 deals with the user auditor’s responsibility to obtain sufficient appropriate audit evidence when a user entity uses the services of one or more service organizations.

It defines the objectives of the user auditor and the requirements relating to audit of the entity using a service organization.

These requirements comprise:

·        Obtaining an Understanding of the Services Provided by a Service Organization, Including Internal Control.

·        Responding to the Assessed Risks of Material Misstatement.

·        Type 1 and Type 2 Reports that Exclude the Services of a Subservice Organization.

·        Fraud, Non-Compliance with Laws and Regulations and Uncorrected Misstatements in Relation to Activities at the Service Organization.

·        Reporting by the User Auditor.

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