May 04, 2004
Outsourcing and Sarbanes-Oxley
SmartPros reports on how accounting practices and audits are affected by offshore outsourcing.
"...the management and auditor of the public company issuer are expected to evaluate the activities of the outsourcing supplier in determining the nature, timing, and extent of evidence required to support its opinion on internal control.
"An outsourcing supplier might do several things to assist the public company auditor, e.g., engage its own auditor to review and report on the systems it uses to process the company's transactions or engage an auditor to test the effectiveness of the controls applied to the company's transaction to enable the auditor to evaluate controls of the supplier. Buyers should anticipate that these volitional safeguards may become regularly negotiated terms of an outsourcing agreement."
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