The Important Relationship between ISAE 3402 and ISAE 3000

When conducting an ISAE 3402 assurance engagement for service organizations, it is important to note that practitioners, (known as professional accountants in public practice) must also adhere to the standards set forth in ISAE 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information. 

The reasoning for this, according to the International Auditing and Assurance Standards Board (IAASB), is that ISAE 3000 includes a number of general provisions, quality control standards and other important engagement considerations that should be adhered to when conducting assurance engagements. Thus, look upon ISAE 3000 as an excellent platform for establishing basic principles and procedures when conducting assurance engagements, such as ISAE 3402.

ISAE 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information consists of the following material that practitioners should be aware of when conducting assurance engagements:

• Being aware and understanding the relationship with ISAE 3000 and other ISAE standards along with other International Standards on Auditing (ISA), specifically, ISA 402, Audit Considerations Relating to an Entity Using a Service Organization (drafted in April, 2009).
• Understanding the ethical requirements Parts A and B of the IFAC Code of Ethics for Professional Accountants.
• Implementing quality control procedures as deemed necessary.
• Being aware of engagement acceptance and continuance provisions.
• Agreeing on the terms of the engagement with the agreeing party.
• Planning and performing the engagement in an effective manner.
• Adequately assessing the appropriateness of the subject matter at hand for the engagement.
• Adequately assessing the suitability of the criteria.
• Consider materiality and assurance engagement risk.
• Using the work of an expert, with adequate skill and knowledge of the subject matter.
• Collecting appropriate evidence for the engagement and being able to document all matters significant for evidence for the assurance engagement.
• Obtaining representations from the responsible party, such as management of the service organization, on a number of important issues.
• Considering subsequent events and the importance of these events in relation to the assurance engagement for the service organization.
• Lastly, the practitioner should have competent knowledge of being able to prepare the assurance report with all necessary information.