At a minimum to comply with PCAOB AS 5,an auditor of a public company that has material transactions processed by a service organization would have to request from the service organization
A) A description of its internal controls.
B) A type one service auditors' report.
C) A type two service auditors' report.
D) A service organization control (SOC) 3 report.

Question

Quizplus · Accepted Answer

According to PCAOB AS 5, if a public company has material transactions processed by a service organization, the auditor must obtain and review a type two service auditors' report to ensure that the internal controls of the service organization are effective in addressing risks related to the services provided to the company. Therefore, option C is the best choice. Option A is incorrect because a description of internal controls alone is not sufficient to assess their effectiveness. Option B is incorrect because a type one report only provides information on the design and implementation of controls, not their operating effectiveness. Option D is incorrect because a SOC 3 report is a general use report that may not be specific to the needs of the public company's audit.

At a Minimum to Comply with PCAOB AS 5,an Auditor