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

CA Isha has issued a SAE 3402 assurance report for Cloudbooks Services Ltd. The service organisation wants to circulate it freely to prospective customers and the general public for marketing. What is the appropriate auditor response?

The auditor should point out that the report's criteria suit only users who understand how the system is used for financial reporting by user entities, and the report says so. The auditor may add wording restricting distribution and use to intended users and purposes, so general marketing circulation is inappropriate.

  1. AAgree, since a published assurance report is always useful to the public
  2. BAgree, provided a fee is charged for each additional copy
  3. CNote that the criteria are relevant only for those who understand how the system is used by user entities for financial reporting; the report states this and may include wording restricting distribution to intended usersCorrect
  4. DAgree only if the report is converted into an audit opinion on the financial statements

Explanation

SAE 3402 guidance says the criteria are relevant only for giving information on the system and controls to those who understand how the system has been used for financial reporting by user entities. The report states this, and the service auditor may add wording restricting distribution to intended users and use for other purposes. Open marketing circulation is therefore inappropriate.

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