Need a quick SSAE 16 summary or primer on the new standard put forth by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA)? If so, take note of the following SSAE 16 summary areas:

1. SSAE 16 has effectively replaced SAS 70. SAS 70, which was put forth in April of 1992 is no longer an auditing standard in use.  This is critically important as it represents one of the most significant changes in reporting on controls for service organizations. For the first time in almost twenty years, we have a new “attest” standard for reporting.

2. SSAE 16 is part of a much bigger, broader change.  That’s right, not only did SSAE 16 replace SAS 70, but an entirely new reporting platform for service organizations has been introduced. Known as Service Organization Control (SOC) reports, organizations can now opt for SOC 1, SOC 2, and/or SOC 3 reporting.

3. Learn about the new SOC reporting options. The new AICPA alphabet of reporting on controls at service organizations can seem a little confusing, but for an ounce of clarity, try and remember the following for your SSAE 16 summary primer:

• SOC 1 reports are to use the SSAE 16 standard and should generally be issued when there is a true and credible link or “nexus” to the internal control over financial reporting (ICFR) concept.
• SOC 2 and SOC 3 reports are a great choice for the growing number of cloud computing and Software as a Service (SaaS) based entities.

4. Learn about the written statement of assertion and the description of the service organization’s “system”.  In short, the written statement of assertion requires management to effectively “assert” to a number of clauses regarding the actual assessment performed by a practitioner (i.e., CPA). Additionally, the description of the “system” requires management of the service organization to comprehensively document their “system”.

That’s a brief SSAE 16 summary for you, thus if you want to learn more about Statement on Standards for Attestation Engagements No. 16, visit the official SSAE 16 Resource Guide, developed by NDB Accountants &  Consultants, a nationally recognized PCAOB CPA firm.

Lastly, if you are in need of SSAE 16 services at a competitive, fixed-fee, contact NDB directly at 1-800-277-5415, ext. 706.

Tags: 1, AICPA SOC, description of a system, management assertion, Reporting on Controls Relevant to Security, SAS 70, service organization, SOC, SOC 2, soc 3, SSAE 16, ssae 16 standard, ssae 16 summary

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