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

CA Vikram is reporting under SAE 3402 on Orbit Data Services, a hosting provider. Orbit's management asks him to include in the scope the controls over preparation of Orbit's own statutory financial statements, and the controls over processing of client transactions. Which conclusion is correct?

Only controls related to the control objectives stated in the description of the system are included, such as those over client transaction processing. Controls over preparing the service organisation's own financial statements are excluded, since they do not relate to the stated control objectives.

  1. ABoth sets of controls fall within controls at the service organisation
  2. BNeither set falls within the definition
  3. COnly controls related to the achievement of the control objectives stated in the description of the system are included; controls over Orbit's own financial statement preparation are notCorrect
  4. DOnly controls over Orbit's own financial statements are included

Explanation

Controls at the service organisation include aspects of user entities' information systems it maintains and related control environment, monitoring and control activities for the services provided. They exclude controls not related to achieving the stated control objectives, such as those for preparing the service organisation's own financial statements. Option A wrongly includes both.

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