ISAE 3402 Provides Assurance To Customers
Organizations increasingly outsource non-core business processes. ISAE 3402 ensures transparency and accountability for service providers through a detailed audit of internet controls over outsourcing. ISAE 3402 allows companies to ensure that service providers adhere to appropriate risk management and security standards.
ISAE 3402 provides a trusted framework for assessing the effectiveness of internal controls, enhancing transparency and building stakeholder confidence. By adopting this standard, organizations streamline their audit processes and demonstrate a commitment to high governance standards.
Comprehensive risk management and controls.
Risk management for legal
and financial compliance.
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Comprehensive risk management and controls.
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Assures financial processes
and security.
The ISAE 3402 audit evaluates the design and effectiveness of internal controls impacting financial statements, with the external auditor assessing control design (Type I) and operational effectiveness over time (Type II). The report typically includes are least a control matrix showing the risk management framework, control objectives, control measures, and audit results.
An ISAE 3402 Type I report includes an opinion of an external auditor on the controls in operation at a specific moment in time.
The external auditor examines whether the controls are suitably designed to provide reasonable assurance that the financial statement assertions are accomplished and whether the controls are in place.
In a Type II report, the external auditor reports on the suitability
of the design and existence of controls and on the operating effectiveness of these controls during a predefined period. This implies that the external auditor performs a detailed examination of the internal controls of the service organization and also examines whether all controls are operating effectively in accordance with predefined processes and controls for and procedures.
The register is consulted continuously by organizations in every industry. By registering your report, you demonstrate that you meet the requirements on ISAE 3402 and are a reliable service provider.
ISAE 3402 reports are similar to a SOC 1 report (US standard).Considering that SOC 1 reports have the same scoping and value as ISAE 3402 report, SOC 1 reports are also registered.
Register you report now
ISAE 3402 is not a certification but an assurance report that confirms outsourced processes are controlled to ensure accurate financial reporting, This report is similar to a SSAE 18 SOC 1 report in the US. To obtain an ISAE 3402 report, an organization must prepare a Systems and Organization Controls (SOC) report, which should be audited by an external auditor to verify that all relevant controls exist and operate effectively.
Your customer requires an ISAE 3402 report to verify that your organization has effective controls in place, especially for financial reporting and compliance. This report provides independent assurance, helps manage risks, and meets regulatory/audit requirements, giving your customer confidence in the reliability and security of your services.
Organizations cannot prepare their own ISAE 3402 report because it requires independent auditing by a qualified third-party auditor. The ISAE 3402 is designed to provide assurance to customers through an objective assessment, which must be conducted by an external firm. To obtain an ISAE 3402 report, your organization would need to engage a certified public accounting firm or another qualified auditing firm with expertise in assurance reporting.
Yes, it's appropriate if your services impact your client’s financial reporting, compliance, or risk management. ISAE 3402 assures clients that you have strong internal controls, which is especially relevant in regulated industries. If not, another assurance standard may be more suitable.
The main advantage of ISAE 3402 for your organization is that it builds trust with clients by demonstrating a high standard of internal controls, especially for services impacting financial reporting and compliance. It can enhance your organization’s competitive edge by meeting clients’ audit and regulatory needs, potentially attracting more business. Additionally, it provides process improvement insights from independent audits, helping strengthen your internal controls and reduce risks.