Auditing Standard No. 402 on factors to consider when auditing an entity using external services, issued with Circular 214/2012 / TT-BTC
Scope of application
1. This Auditing Standard specifies and guides the responsibility of auditors and auditing firms (hereinafter referred to as "auditors") To obtain sufficient appropriate audit evidence when auditing an entity using an external service. In particular, this Standard also guides the auditor in the application of Vietnamese Standards on Auditing 315 and 330 in understanding the entity using external services, including internal control related to audit, sufficient to detect and evaluate the risks of material misstatement and to design and perform follow-up audit procedures for these risks.
2. Many entities hire service delivery organizations to perform a particular task under the direction of the entity or to completely ｒｅｐｌａｃｅ some part or function of the entity, e.g. function. comply with tax regulations. Many of the services provided by these organizations are an integral part of the business activities of the entity. However, not all of these services are related to the audit.
3. Services provided by a service organization are considered relevant to the user entity's financial reporting audit when those services and controls over the service are part of an entity's information system that is involved in the preparation and presentation of the financial statements, including related business processes. Although most of the controls at the service organization may be related to financial reporting, some other controls may also be relevant to the audit, for example controls. for property protection. The service organization's services are part of a user entity's information system that is relevant to the preparation and presentation of the financial statements, including related business processes, if These services affect any of the following:
- Transaction groups in the user entity's operations play an important role in the entity's financial report;
- The procedures are carried out by the service user in the information technology system or by manual method, to create, account, process and modify transactions as needed, record them in the Ledger and presentation on financial statements;
- The related accounting books, which can be in paper or electronic form, supporting information and specific items on the financial statements of the service user entity, are used to create, account, processing and reporting transactions of user entities; including correcting inaccurate information and how data is recorded in the Ledger;
How the user entity's information system records events and situations (other than transactions) that are important to the financial reporting;
- User entity's financial reporting process, including important accounting estimates and disclosures;
- Controls over entries, including entries that reflect infrequent transactions, unusual transactions or adjustments.
4. The content and scope of the user auditor's work in connection with the external services provided to the entity depends on the nature and importance of the services. the user entity and the relevance of those services to the audit.
5. This Standard does not apply to services provided by financial institutions which are limited to the processing of specific transactions approved by the entity for an entity's account. in a financial institution, such as the processing of check account transactions performed by a bank or the processing of securities transactions performed by a brokerage organization. In addition, this Standard does not apply to the audit of transactions resulting from an entity's financial interests in other entities such as partnerships, corporations and joint ventures. when these benefits are recorded and reported to people who have an interest in the company.
6. The auditor and the firm shall comply with the provisions and instructions of this Standard in the course of performing the audit and providing related services.
The entity (the customer) and the parties using the results of the audit are required to have the necessary understanding of the requirements and guidelines of this International Standard in order to coordinate work with the auditor and the firm. resolve relationships in the audit process.
Target
7. Objectives of auditors and corporate auditing When auditing entities using external services are:
Full understanding of the nature and importance of the external services used by the entity and their impact on the entity's internal control relevant to the audit, to determine assessing and assessing the risks of material misstatement;
- Design and implement audit procedures for those risks.
See full text Auditing Standard No. 402
