Sas 70 & Las Vegas Data Centers

This article will provide an overview of Statement of Auditing Standards (SAS) No

. 70 and discuss how it affects Las Vegas data centers and their clients. SAS 70 is a nationally recognized auditing standard developed by the American Institute of Certified Public Accountants (AICPA).

This audit represents a company has been through an in-depth audit of its control objectives and control activities, which commonly include management of information technology and other related processes.

SAS No. 70 is the authoritative guidance enabling service organizations, such as Las Vegas data centers, to disclose their control processes to clients and their client's auditors in a uniform reporting format.

SAS 70 Type II confirms a Las Vegas data center's operational procedures and security have been tested and reviewed by an independent, certified public accounting firm to ensure controls and processes are operating effectively to safeguard and protect customers' data and equipment.

Statement of Auditing Standards No. 70 provides guidance so an independent auditor can issue an opinion on a Las Vegas data center's (or other service organization's) description of controls through a Service Auditor's Report. Service auditors must follow the AICPA's standards for quality control, reporting and fieldwork.

SAS No. 70 is usually applicable when an independent auditor is the one planning the financial statement audit of a particular Las Vegas data center or other service organization. Service organizations (such as Las Vegas data centers) that impact a user organizations internal controls system could be bank trust departments, application service providers, third party administrators, claim's processing centers or other data processing service bureaus.

When an auditor performs an audit of a user organization's financial statement, he or she obtains an understanding of the organization's internal control sufficient enough to plan the audit as required by SAS No. 55 (Consideration of Internal Control in a Financial Statement Audit).

An auditor issues an unqualified opinion as to the operating effectiveness of the controls specified by a Las Vegas data center in the areas of:

- Physical Security

- Logical Security

- Incident Tracking and Response

- Customer Setup and Implementation

- Data Center Operations and Environmental Controls

The auditor will evaluate and identify a Las Vegas data center's services, whether they include data hosting, IT infrastructure, transaction processing or other data processing services to the user organization. Commonly, the auditor needs to gain an understanding of the controls at the Las Vegas data center in order to properly plan an audit and properly evaluate control risk.

Las Vegas data centers and other service organizations receive significant value and benefits from having a SAS No. 70 audit performed. The issuance of a Service Auditor's Report (with an unqualified opinion by an Independent Accounting Firm) differentiates the Las Vegas data center from its peers by providing evidence of the establishment of effectively designed control activities and control objectives. This audit also helps Las Vegas data centers build trust with its customers and clients.

SAS No. 70 engagements are commonly performed by audit, risk and control oriented professional with experience in auditing, information security and accounting.

by: Michael Duckett

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