2019 KBA Examinations of Service Organizations

Welcome to Service Organizations 2019. Check out the updates and enhancements to 2019 Knowledge-Based Examinations of Service Organizations. 2019 Knowledge-Based Examination of Service Organizations will be available for CCH ProSystem fx Knowledge Coach in March 2019.

Service Organizations Changes

Based on the latest literature, standards, and guidance, the changes coming to the 2019 Examinations of Service Organizations title include:

  • AICPA Auditing Standards Board (ASB) Statements on Standards for Attestation Engagements (SSAEs), Attestation Standards: Clarification and Recodification (SSAE No. 18)
  • 2011 Revision of Government Auditing Standards (GAGAS, or the Yellow Book; QC Section 10, A Firm’s System of Quality Control
  • The revised AICPA Code of Professional Conduct (Code), including the provisions of ET Section 1.295, Nonattest Services
  • AICPA AAG, Reporting on Controls at a Service Organization Relevant to Security, Availability, Processing Integrity, Confidentiality, or Privacy (SOC 2) – Revised 2018, 2017 Trust Services Criteria, and DC Section 200 – 2018 Description Criteria

Service Organizations Enhancements

 Additionally, the following enhancements are also included.

  • New and reorganized columns in the workpapers documenting internal controls (ATT-401 and ATT-402) to improve workflow and address questions previously raised by customers. Refer to KCO-001 for more details and roll forward considerations.
  • A new “comments table” in AUD-100 Engagement-Level Tailoring Questions to document any information you want to capture related to tailoring.
  • New table added to KBA-501, under Section 2, that allows a user in SOC 2 and SOC 3 engagements to document risks by TSP/COSO categories. Please note that risks identified in other workpapers will flow into Table 1.  For SOC 1 engagements, the auditor should add additional risks in Table 1.  For SOC 2 and SOC 3 engagements, the auditor should add additional risks by TSP/COSO category in Table 2.
  • Table 1 will always be shown no matter the type of engagement
  • Table 2 will only show for SOC 2 and SOC 3 Engagements
  • The addition of many new documents as follows:
    • AID-916 Report Preparation Checklist: Engagement to Report on a Service Organization’s Controls (SOC 3)
    • COR-921 Representation Letter – SOC 3 Engagements
    • RPT-1055 Service Auditor’s Engagement (SOC 2): Unmodified Opinion on a Description of Cloud Service Organization
    • RPT-1056 Service Auditor’s Engagement (SOC 2): Unmodified Opinion on a Health Care Organization 

Tips to Improve Realizations & Client Service

Regarding increasing your realizations and improving your client service, it is critical to find ways to maximize efficiencies. Doing so will ensure a healthy bottom line and, at the same time, improved client service. Consider these tips:

  • When you roll-forward your prior year engagements, make sure you get the latest content updates. Also, make sure you keep your responses, where it makes sense. Then, you simply review for changes.
    • CCH ProSystem fx Knowledge Coach allows updating to the latest content at any time, while keeping your answers and customizations. Take advantage of the saved time and start your planning!
  • Give yourself a head start by reducing your client’s PBC list by approximately 25% through technology.
    • CCH Audit Accelerator requests all the data you need from your client’s general ledger, accounts payable and accounts receivable sub-ledger. It then transforms that data into the most commonly used workpapers, including access to the detailed transactions. Then, with TeamMate Analytics, run analytics to see anomalies or risky transactions more quickly for planning a higher quality audit. What you gain is more answers at your fingertips and, ultimately, a more informed view of your client at the beginning of each engagement.
  • Tailor your audit programs in direct response to the client’s risk. This will help you avoid over and under auditing. You will also get your ‘best bang for your buck’ with your audit procedures.
    • By design, Knowledge Coach easily ties risks to audit procedures. The result is a higher quality and more efficient audit and, thus, a happier client.

Next Steps

Are you interested in increased realizations and improved client service? First, then, check out the Integrated Audit Approach webpage. Second, complete the form below to continue the conversation with us.

Yes, I’d like to know more about how the Integrated Audit Approach will help me improve realizations and client service.

AUTHOR

Kurt Pitts

Kurt Pitts is a Senior Business Analyst at Wolters Kluwer Tax and Accounting North America. Kurt participates in design and development of CCH® ProSystem fx® Knowledge Coach. Kurt also works with internal teams, editorial and customers to provide new features and industry titles for CCH® ProSystem fx® Knowledge Coach. Prior to joining Wolters Kluwer in 2014, Kurt was a CPA with a top Southeast Regional Accounting Firm and has a Bachelor’s Degree in Accounting from Georgia Southwestern State University.

All stories by: Kurt Pitts