What is SAS 70 and it’s Benefits
The SAS70 is the standard by which auditors evaluate servicing companies. If you are involved in this line of work, becoming familiar with the SAS70 concepts will be of paramount importance. SAS 70 is a well-known acronym that represents a detailed audit of a third-party service organization.
The SAS70 or Statement on Auditing Standard 70 is the criteria through which servicing firms and companies are assessed by auditors. The SAS70 or Statement on Auditing Standard 70 is the criteria through which servicing firms and companies are assessed by auditors. Developed by the AICPA (American Institute of Certified Public Accountants), it also promotes transparency in business.
Services and Firms that can be Audited
These include businesses that fall under the category of outsourcing services. Among those that can be labeled as such are credit processors and data centers. Also included are clearing houses and security firms. After the auditor goes through all the pertinent details, the data is released as the “Service Auditor’s Report”.
This report is reserved for the use of the company and the auditor. It is also given to the clients. There are some instances wherein the report is confined to the use of the CPA firm. Even so, the right to distribute the paper is left to the service company.
The SAS70 Reports
These are classified under two variants: Type I and Type II.
Type I contains the assessment of the auditor. This evaluation includes the way the service / company does its business. It also contains an appraisal of the company with regards as to how it tries to attain its goals.
Type II is similar in many respects. The main difference is the time period involved. Type I is for a solitary day. Type II covers a longer time span, six months on the average. Given this fact Type II is more efficient from a client’s perspective. Both reports have the same goal however: assess the service’s control setting for their clients / customers.
There are no hard and fast rules for performing these reports. Generally Type I are conducted on an annual basis. Type II is usually yearly, but some go through the process every six months. Some companies do it even less frequently. The reason is that given its thoroughness, it can be done less.
Benefits of SAS 70:
The general consensus is that service companies perform audit twice yearly. Doing so helps one earn the trust of clients. By allowing themselves to undergo such procedures, an environment of trust is built. Submitting these reports to clients helps build confidence in the overall worthiness of the company. A positive review can also help a company in terms of promoting itself.
The efficiency of this auditing review is evidenced by its use in other institutions. Today it is now being used by various finance firms as well. Some companies undergo the process on their own. But increasingly it is becoming almost mandatory practice.
Service firms linked with health providers are also required by their clients to be subjected to this procedure. As the advantages of being subjected to this report become evident, more fields and industries are expected to use this service.
In business nothing is more important than earning the trust of a client. When a company allows itself to be subjected to unbiased reports by an auditor, their reliability becomes evident. The trust that one earns from customers and business partners will pay off for whatever expenses one might gain when availing of SAS70.
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