When payroll is outsourced and the auditor relies on a SAS 70 Type II audit report, dual testing is not relevant.

Question

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When an auditor relies on a SAS 70 Type II audit report, it means that the service organization has already been audited by an independent auditor, which includes the testing of controls relevant to the services they provide. As a result, the auditor does not need to perform dual testing, meaning that they do not need to repeat the same testing that has already been done by the independent auditor.

When Payroll Is Outsourced and the Auditor Relies on a SAS