Managed Services

Ask A-LIGN: When receiving our first SSAE 16 audit, if the auditors find minor mistakes, will we have the opportunity to correct them?

By: Scott Price, Managing Partner of A-LIGN Answer: I hear this question often and, my answer is, “it depends.” I realize this is not the response most of you were hoping for, but I will elaborate. If your audit is a Type 1 SSAE 16, you can elect to have the review date of the report dated for when the service organization has remediated all deficiencies found in the controls. This is one of the main reasons why service organizations like to start with a Type 1 audit. However, in the same breath, the user community sees the limitations of a Type 1 since it only gives assurance at a specific point in time. It is a snapshot.

Read More

Ask A-LIGN: What is the difference between a SOC logo and a SOC seal?

By: Scott Price, Managing Partner of A-LIGN  Answer: Misuse of Service Organization Control (SOC) terminology is a common mishap in the marketplace. When it comes to the use of the SOC logo or seal, many tend to assume the terms mean the same thing (six of one, half a dozen of the other), but in reality they are classified as entirely different entities. Let me explain…

Read More

Ask A-LIGN: Is SSAE 16 a Certification?

Answer: No, SSAE 16 is not a certification. Here’s why: It is incorrect to say that you are SSAE 16 certified, because there is not a certification awarded to you after the engagement. The appropriate wording would be to state, “we have received an unqualified (Type 1 or Type 2) SSAE 16 report as a result of a service auditor performing an audit in accordance with SSAE 16 on the services within the scope of our review.” Once we have issued a final report to our clients, we will then issue the AICPA SOC Logo Guidelines form. The guidelines will explain exactly who can use the logo, how to use it appropriately, and when you must end the use or display of the logo.

Read More

A-LIGN Security and Compliance Services To Present Webinar, “Reducing Audit Impact by A-LIGNing PCI DSS, SOC 1 & 2 Requirements”

Gene Geiger, Director at A-LIGN Security and Compliance Services will present a webinar to share practical recommendations for improving overall audit efficiency which will lead to reduced audit impact, audit costs and audit fatigue. The presentation will take place on April 18, 2012 from 1-2 pm EST. All individuals/organizations are…

Read More

Evaluating Managed Service Providers’ PCI DSS Compliance

You need a managed service provider to outsource information technology services for your organization, but since you are in the payment card industry, they will need to be PCI DSS compliant. So you Google the service you need, compile a list of possible vendors, review their website and see that critical PCI DSS logo, so you are good-to-go, right? Maybe. The PCI Data Security Standard (“DSS”) is a set of information security standards published by the PCI Security Standards Council (“SSC”) for companies that store, process or transmit cardholder data. The PCI DSS includes twelve requirements that companies are required to implement in order to be PCI DSS compliant. When considering PCI DSS compliant service providers it is critical to understand which of their service offerings have been validated as PCI DSS compliant and which requirements were included in the assessment. If I had a nickel for every time a client said “they are PCI DSS so we are OK” I could buy a gallon of gas.

Read More

The Value of SOC 2

If your service organization processes customer transactions that impact financial reporting, such as payroll or other financial reporting functions, you are more than likely familiar with the SSAE 16 SOC 1 report and its predecessor the SAS 70. Your customer’s auditors request the SAS 70, now the SSAE 16, every year to fulfill your customer’s year-end financial statement audit requirements. You gladly undergo the annual SSAE 16 audit so you have the report ready for your customers each year. One SSAE16 audit is worth keeping an army of customer auditors from knocking on your door asking for the same evidence of internal controls. More than likely the SSAE 16 is also required to meet contractual obligations to your customers. So to reduce the number of audits you have to endure each year, to meeting contractual obligations and also to get an independent evaluation of your internal controls, you engaged a CPA firm to perform the SSAE 16 audit.

Read More

SOC 1 / SSAE 16 Case Study for Payroll Administration Services

Case Study - SSAE 16 (SOC 1) for Payroll Administration Services Industry Organizations that directly provide payroll administration services to your clients or are a vendor associated with companies that provide payroll administration services such as electronic funds transfer, payroll debit cards, payroll software, tax filing, or time and attendance and as such have a direct or an indirect impact on the end customers’ financial statements.

Read More

SAS 70 is gone??? Why can’t I get a SSAE 16?

In the past two weeks, we have been asked my multiple clients to explain to their customers that the SAS 70 audit standard was superseded as of June 15, 2011.  Our clients were faced with frustrated user organizations that were looking for their SAS 70 audit report.  We had to not only provide our literature and white papers outlining the audit standard has been superseded but provided information directly from the American Institute of CPAs (AICPA) to the same effect. It even got to the point where I told the user organization to call a national accounting firm in their city to confirm what we have said along with the AICPA.   This frustration from user organizations can be expected when the SAS 70 audit requirement lies in the hands of a contracting officer at the user organization.  The communication gap between the legal or vendor relations department and the accounting departments at an organization sometimes is wide and must be bridged.  When the exposure draft of SSAE 16 was released years ago, I recall preaching to clients that they should begin speaking with their customers regarding the change and update contracts with customers as well as vendors to reflect the eventual vanishing of SAS 70.  We continue to encourage clients as we move into September, which is typically “SSAE 16 busy season, “ that our clients should contact their customers and educate them regarding the change and utilize A-LIGN as a resource to provide additional literature where necessary to explain the new standard.

Read More

SSAE 16 Benefits to Service Organizations

Service organizations receive significant value from having an SSAE 16 examination performed.  An SSAE 16 report with an unqualified opinion issued by an independent CPA firm differentiates your company from your peers by demonstrating that your company has achieved a defined set of control objectives relevant to your specific industry, your controls are effectively designed, and, in the case of a Type 2 report, that the controls are operating effectively over a period of time.

Read More

SOC 2 and Subservice Organizations

SOC 2 AND SUBSERVICE ORGANIZATIONS After a review of the new SOC 2 guide, Reporting on Controls at a Service Organization, I noticed that the responsibilities of the service auditor, service organization and subservice organization all seem to have increased when it comes to how subservice organizations may be considered / treated under the new standard.  Trying to get all three parties on the same page is a daunting feat in itself and I wanted to take a moment to share some of the highlights. The inclusive and carve-out method can still be used for subservice organizations just as in SOC 1.

Read More