A service center:
A)must have an auditor hired by the PCAOB test the controls of the service center.
B)audit cannot be relied upon by those outside of the firm.
C)can engage a CPA firm to issue a report on their internal controls for use by all customers and their independent auditors.
D)must make all of their systems available to any external party.

Question

Quizplus · Accepted Answer

A service center can engage a CPA firm to issue a report on their internal controls for use by all customers and their independent auditors. This report is called a Service Organization Control (SOC) report, which provides assurance that the service organization's controls are adequately designed and operating effectively. However, the report is only useful if the CPA firm is reputable and the report is based on appropriate audit procedures. Choices A, B, and D are incorrect because they are inaccurate statements about service centers and their audit obligations.

A Service Center