What type of report(s)do auditors of a service organization prepare?
A)Type I report describes the service organization's controls and evaluates whether they are appropriate to achieve specific control objectives
B)Type II contains the results of internal control tests conducted by the service organization to determine whether the controls provide reasonable assurance that the control objectives were achieved
C)Type II contains the information in a Type I report and the results of internal control tests conducted by the service organization to determine whether the controls provide reasonable assurance that the control objectives were achieved
D)Type III contains an overall evaluation of the complete internal control structure as required by Sarbanes-Oxley
E)All of the above
F)A,B,and C

Question

Quizplus · Accepted Answer

Auditors of a service organization prepare Type I and Type II reports. Type I report describes the service organization's controls and evaluates whether they are appropriate to achieve specific control objectives. Type II contains the results of internal control tests conducted by the service organization to determine whether the controls provide reasonable assurance that the control objectives were achieved. Type II report contains the information in a Type I report and the results of internal control tests conducted by the service organization to determine whether the controls provide reasonable assurance that the control objectives were achieved. Therefore, the correct answer is F (A, B, and C). Type III report is not relevant to the audit of service organizations as it is required by Sarbanes-Oxley only for publicly traded companies to report on the effectiveness of the company's internal control over financial reporting.

What Type of Report(s)do Auditors of a Service Organization Prepare