Otto decided to outsource the payroll function to Magna Plus.For the purpose of an assurance engagement,Magna is considered a
A)service organization.
B)user entity.
C)payroll administrator.
D)human resource company.

Question

Quizplus · Accepted Answer

Magna Plus is considered a service organization because it is providing a service (payroll function outsourcing) to Otto. As an assurance engagement is being conducted, it is important to understand the specific controls and processes that Magna Plus has in place to ensure the reliability and accuracy of the payroll function.

Otto Decided to Outsource the Payroll Function to Magna Plus