Editor’s Note: The following information was taken from the AICPA website and applies only to Certified Public Accountants.
The American Institute of Certified Public Accountants (AICPA) have long set the standard for Statement on Auditing Standards No. 70, known simply as SAS 70 to many. The auditing standard became the global framework for reporting on controls at service organizations. Now as per their website (www.aicpa.org) SAS 70 is nearing the end of its lifespan after approximately 19 years of service.
Statement on Standards for Attestation Engagements (SSAE) No. 16, known as SSAE 16, has been put forth as the new standard by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA). Here are some of the key differences:
- The SSAE 16, unlike SAS 70, is an “attest” standard, falling under the attestation framework, and not that of the “auditing” framework.
- The SSAE 16 requires a description of the “system”. The SSAE 16 standard (published in 2010) provides details and illustrations of subject matter that should be included as part of the description of the “system”.
- SSAE 16 standard requires a written “assertion” by management.
These changes may improve the standards in a couple of ways. First, it may make certification cheaper as it is an assertion model. Second, by management attest to the system, the management will be more liable for any misinformation.
When speaking to your vendors, find out if and when they will be updating to the SSAE 16.
Ash Bhatnagar, CFP®
RIA Independence Co.