Service organization control (SOC) reports may be requested by auditors when a service organization processes transactions related to a client's (user organization) internal control over financial reporting. Required: For each of the following statements related to Service Organization Control (SOC) reports, indicate whether it is appropriately related to a Type 1 report (T1), Type 2 report (T2), both a Type 1 and Type 2 report (B), or neither a Type 1 or Type 2 report (N). a. Disclaims an opinion on the fairness of the entity's financial statements. b. Provides a description of the service organization's internal control over financial reporting. c. Summarizes tests of operating effectiveness of controls the service organization. d. Expresses an opinion on the suitability of design of internal controls over financial reporting. B e. Use of the service auditor's report is restricted to specified parties. f. Would be requested when client is an issuer g. Disclaims an opinion on the operating effectiveness of internal control over financial reporting h. Would be requested in the audit of a nonissuer if the audit team has decided to rely on internal control over financial reporting to reduce substantive testing T2 +

Service organization control (SOC) reports may be requested by auditors when a service organization processes transactions related to a client's (user organization) internal control over financial reporting. Required: For each of the following statements related to Service Organization Control (SOC) reports, indicate whether it is appropriately related to a Type 1 report (T1), Type 2 report (T2), both a Type 1 and Type 2 report (B), or neither a Type 1 or Type 2 report (N). a. Disclaims an opinion on the fairness of the entity's financial statements. b. Provides a description of the service organization's internal control over financial reporting. c. Summarizes tests of operating effectiveness of controls the service organization. d. Expresses an opinion on the suitability of design of internal controls over financial reporting. B e. Use of the service auditor's report is restricted to specified parties. f. Would be requested when client is an issuer g. Disclaims an opinion on the operating effectiveness of internal control over financial reporting h. Would be requested in the audit of a nonissuer if the audit team has decided to rely on internal control over financial reporting to reduce substantive testing T2 +

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Service organization control (SOC) reports may be requested by auditors when a service organization processes transactions related
to a client's (user organization) internal control over financial reporting.
Required:
For each of the following statements related to Service Organization Control (SOC) reports, indicate whether it is appropriately related
to a Type 1 report (T1), Type 2 report (T2), both a Type 1 and Type 2 report (B), or neither a Type 1 or Type 2 report (N).
a. Disclaims an opinion on the fairness of the entity's financial statements.
b. Provides a description of the service organization's internal control over financial reporting.
c. Summarizes tests of operating effectiveness of controls at the service organization.
d. Expresses an opinion on the suitability of design of internal controls over financial reporting. B
e. Use of the service auditor's report is restricted to specified parties.
f. Would be requested when client is an issuer.
g. Disclaims an opinion on the operating effectiveness of internal control over financial
reporting
h. Would be requested in the audit of a nonissuer if the audit team has decided to rely on
internal control over financial reporting to reduce substantive testing.
T2

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