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CA Final · Advanced Auditing, Assurance and Professional Ethics · Prospective Financial Information and Other Assurance Services

CA Bhatt has completed a service auditor's engagement on Orion Data Services Ltd under SAE 3402. The management of Orion wants the report to be freely circulated to prospective customers who have no knowledge of how user entities use the system for financial reporting. Which action is most appropriate?

The report should state that the criteria are relevant only for informing those who understand how the system is used for financial reporting by user entities. The service auditor may also add wording restricting distribution to intended users, use by others, or use for other purposes.

  1. AAllow free circulation, because prospective customers are potential user entities
  2. BRemove the statement on the relevance of the criteria, since it limits circulation
  3. CMake the report public after obtaining a management representation
  4. DState in the report that the criteria are relevant only for providing information about the system, including controls, to those who understand how it has been used for financial reporting by user entities, and consider adding wording restricting distribution to intended usersCorrect

Explanation

The criteria are relevant only for giving information about the system and controls to those who understand its use in financial reporting by user entities. The report states this, and the service auditor may add wording restricting distribution to intended users, use by others or other purposes. Free circulation would ignore this limitation.

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