AASB

Exposure Draft, Reporting on Controls at a Service Organization Relevant to User Entities’ Internal Control Over Financial Reporting

Summary

The Auditing and Assurance Standards Board (AASB) proposes, subject to comments received on exposure, to issue revised Canadian Standard on Assurance Engagements (CSAE) 3416, Reporting on Controls at a Service Organization Relevant to User Entities’ Internal Control Over Financial Reporting. The revised CSAE 3416 would replace extant CSAE 3416, Reporting on Controls at a Service Organization.

Staff Contact(s)

Karen DeGiobbi, CPA, CA

Principal, Auditing and Assurance Standards Board

Background

When CSAE 3416 was issued in 2010, stakeholders indicated that the marketplace for these types of engagements is highly integrated between Canada and the United States.  The AASB decided to align the Canadian standard with the equivalent American Institute of Certified Public Accountants (AICPA) standard (AT Section 801).  Discussions with stakeholders indicate support for continued alignment of CSAE 3416 with the AICPA standard.

In April 2016, the AICPA issued AT-C Section 320 (included in the AICPA’s release of Statement on Standards for Attestation Engagements (SSAE) No. 18) to replace AT Section 801. The new standard was effective for service auditors’ reports dated on or after May 1, 2017. Because of this standard’s issuance, in November 2016, the AASB approved a project to consider revisions to CSAE 3416.

The objectives of the project to revise and replace CSAE 3416 are to:

  • Align CSAE 3416 with the AICPA’s new AT-C Section 320;
  • Align CSAE 3416 with Canadian umbrella standard CSAE 3000; and
  • Continue to align CSAE 3416 in most respects with International Standard on Assurance Engagements (ISAE) 3402.