Document Search

International Journal

ISSAI Executive Summaries

Executive Summary:

ISSAI 1402 – Audit Considerations Relating to an Entity Using a Service Organization


This Practice Note provides supplementary guidance on ISA 402 - Audit Considerations Relating to an Entity Using a Service Organization

ISSAI Category:

Level 4: General Auditing Guidelines - General Auditing Guidelines on Financial Audit

Target Group:

Public sector external auditors


ISA 402 deals with the auditor's responsibility to obtain sufficient appropriate audit evidence when a user entity uses the services of one or more service organizations.

Specifically, it expands on how the user auditor applies ISA 315 and 330 in obtaining an understanding of the user entity including internal control relevant to the audit, sufficient to identify and assess the risks of material misstatement and in designing and performing further audit procedures responsive to those risks.

Scope - Content:

The Practice Note provides additional guidance for public sector auditors related to

  • Scope of the ISA
  • Objectives
  • Definitions
  • Obtaining an understanding of the services provided by a service organization including internal control
  • Specific considerations for the public sector auditor with a judicial role.

The Appendix of the Standard includes examples of activities and situations related to service organizations that may be relevant in a public sector context.

Author - Committee:

INTOSAI Professional Standards Committee – Financial Audit Subcommittee


Approved at XXth Congress of INTOSAI, Johannesburg 2010


Related Documents - Executive Summaries:
Related Documents - ISSAI Full Versions:
Related Documents - Others:

ISA 402 is applicable to auditors of public sector entities in their role as auditors of financial statements.

ISA 402 should be applied in combination with ISA 315 (Identifying and Assessing the Risks of Material Misstatements through Understanding the Entity and its Environment) and ISA 330 (The Auditor’s Responses to Assessed Risks).

<< back