ISAE 3402 audit

ISAE 3402 (International Standard on Assurance Engagements 3402) is an internationally recognized auditing standard. It enables an independent IT auditor, such as 2-Control, to express an opinion on the internal controls of a service organization that are relevant to its clients’ financial reporting. It provides clients with assurance that the processes they have outsourced to you are properly managed.

An ISAE 3402 report issued by 2-Control offers your organization significant benefits:

• International Recognition: You will have a report that is recognized and accepted worldwide.
• Competitive Advantage: It gives you an edge in tenders and selection processes.
• Demonstrable Quality: You can demonstrably guarantee your clients that the quality of the outsourced processes is assured.
• Efficiency for Clients: Your client’s auditor can rely on your ISAE 3402 report for the financial statement audit.
• Reduced Audit Burden: The number of audits conducted by various clients (or their auditors) at your location can be significantly reduced.

This audit is relevant for service organizations that outsource processes that may affect their clients’ financial reporting. Examples include:

• Payroll processors
• Asset managers
• Data centers that host financial applications
• Pension administrators
• Any organization where the outsourced service is a link in the client’s financial process.

• Type I: This report describes the design of your organization’s processes and control measures and provides an assessment of the suitability of this design at a specific point in time. It confirms that the measures exists.
• Type II: This report goes further. It not only describes the design but also assesses the effective functioning of the control measures over a longer period (usually at least 6 months). This type offers the greatest assurance to your customers.

• ISAE 3402: Focuses primarily on the controls relevant to the financial reporting of the service organization’s clients.
• SOC 2: Focuses more broadly on IT service organizations and evaluates controls based on the Trust Service Criteria (Security, Availability, etc.), which is often more relevant to IT and cloud services.

1. Planning & Scope: Determining the scope of the audit and the relevant management objectives.
2. Readiness Assessment (Optional): A baseline assessment to determine where your organization stands and what, if anything, still needs to be done.
3. Testing of Controls: 2-Control’s IT auditors perform the audit procedures (documentation review, interviews, line checks, etc.).
4. Reporting: Preparation of the ISAE 3402 Type I or Type II assurance report, including a description of your system, the control measures, and the auditor’s opinion.