A computer service centre processes, for an auditor's client, financial data that has a material effect on that client's financial statements. The independent auditor need NOT consider a review of the service centre controls if:
A) he or she is satisfied that a special report on internal controls issued by the service centre's independent auditor can be relied on to the extent desired.
B) the service centre is a partially owned subsidiary of the client company, whose financial statements are examined by another audit firm.
C) the service centre processes data exclusively for the audit client and its subsidiaries.
D) the service centre controls have already been reviewed by the internal audit team of the client.

Question

Quizplus · Accepted Answer

The independent auditor does not need to consider a review of the service centre controls if they can rely on a special report on internal controls issued by the service centre's independent auditor to the extent desired. This means that if the independent auditor is satisfied with the report, they do not need to perform their own review of the service centre's controls. Options B, C, and D are not relevant to this situation.

A Computer Service Centre Processes, for an Auditor's Client, Financial