For decades, Statements on Auditing Standards (SAS) have been used to provide guidance to external auditors on Generally Accepted Tim jerseys Auditing Standards (GAAS). The certified public accountants' authoritative bodies in individual countries typically issue them.?
In the United States, the American Institute of Certified Public Accountants holds the copyright and disseminates these SAS standards. They are commonly abbreviated as "SAS" followed by their respective number and title.?
A common standard, known as SAS 70, was issued in 1993. It provides guidance to auditors when they are assessing the internal controls of a service provider.?
The SOX Impact on SAS
In 2002, the Sarbanes?Oxley Act (known commonly as SOX), a U.S. federal law which set new standards for all U.S. publicly registered companies, went into effect. SOX was primarily designed to restore investor confidence following highly publicized bankruptcies and internal control breakdowns.?
One section of SOX focuses on the processes that flow into an organization's financial reporting systems and requires that they
If, for example, an organization uses a BPO to process payroll, then the organizations will have to conduct audits and produce the results of those audits from their service providers. Conducting independent results of all their service providers can be a daunting task, but they do have another option. If their service providers can produce an SAS Type II certification, then they may be able to bypass the audit process and use that certification to meet the SOX legislation Tim jerseys requirements.?
As a result, U.S. public companies started putting pressure on their service organizations, such as outsourced payroll providers?to demonstrate SAS 70 compliance. In order to meet their clients' requirements and to remain competitive, masses of service organizations started undergoing the audit process and many of them obtained SAS 70 compliance. For some organizations, SAS 70 compliance evolved from a nice-to-have to a mandatory requirement.