Do you know what Microsoft, Google, Swisscom or BNP Paribas have in common ? They have all obtained ISAE 3402 recognition.
This recognition is far from being reserved for large companies. Indeed, it is aimed at all service providers – insurance, provident society, real estate investment, fiduciary, IT services, etc. – who must provide their clients with the assurance of reliable financial reporting with regard to the services offered.
Do you also have to prove the existence and efficiency of your internal control system? Do you need to show that you have put in place appropriate measures to prevent accounting errors or fraud? This recognition is made for you. Discover it in 3 key points.
1/ What definition should be given to ISAE 3402 ?
First of all, ISAE 3402 is not a certification but a recognition. It replaces the former American standard SAS 70 and is particularly aimed at service providers. Thus, they can prove to their customers that their processes and their internal control over financial reporting are working.
Recognition is often given by the Big Four (PWC, Deloitte, EY or KPMG), but also by other audit firms that report their findings in a report. There are 2 levels of recognition:
The ISAE 3402 Type I report certifies that the service provider has described its control activities and that they are rigorously applied but without an evaluation of their effectiveness.
The ISAE 3402 Type II report, in addition to the Type I elements, attests to the operational effectiveness of the controls in place for a minimum period of 6 months. This means that the controls performed reduce risks and provide reasonable assurance of proper functioning.
2/ Why ISAE 3402 ?
It is an international recognition attested by independent auditors. It is a guarantee of reliability for the service providers’ customers and brings a real added value in terms of image for the supplier.
The recognized ISAE 3402 company can prove the reliability of its internal control system by presenting a single report to all its customers. Therefore, it avoids having to undergo multiple audits performed by its customers.
3/ What are the advantages ?
Unlike other internal control standards, ISAE 3402 focuses on the implementation and effectiveness of controls. This internal control system makes it possible to monitor the implementation of all controls in the company when it is implemented in a pragmatic manner.
In addition, you can also integrate other recurring tasks using an appropriate computer application. Employees will adhere more easily to the system if it covers the documentation necessary for their activity and if it helps them in the realization of their tasks.
In the end, it’s a real bargain! Find out how to turn this additional requirement into a real benefit for your company with Optimiso Suite software for ISAE 3402.