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SSAE 18 Now In Effect

2 min read
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With it being the first week of May, there's an important reminder to point out to the financial industry regarding SOC reports for vendor management. As of Mon, May 1, SSAE 18 is now in effect.

Are you familiar with SSAE 18 yet? It will effect your preparation for reviewing SOC reports going forward. Here's a reminder of what it is. 

SSAE 18 Overview  

  • Its purpose = to clarify the auditing standards and to reduce duplication within similar standards covering Examinations, Reviews and Agreed-Upon Procedure engagements, specifically SSAE Nos. 10-17. (These now fall under SSAE 18.)
  • Key point of it = your vendors who use vendors of their own (your fourth parties) now must identify functions and controls that proves your fourth parties are performing.
  • SSAE 18 does not provide you with any additional assurance as the scope of your vendor’s audit will not include the operating effectiveness of the controls at your vendor’s subservice organization. However, it will provide the guidance you need to perform an informed review of the subservice organization’s SOC 1 or 2 report or other available and comparable documentation.
  • SOC 1 and SSAE 16 will no longer be synonymous. 
  • The SSAE 18 does not directly replace the SSAE 16 and does not affect SOC 2 or 3's.
  • Related SOC 1 updates:
    • Risk Assessments required based on control objectives within the SOC
    • Refined Complementary User Entity Controls (CUECs) so that only controls that directly relate back to the product/service in scope of the report are noted
    • Auditors are required to gain further clarification and understanding, although not required to be noted in the report
  • By mid to late 2017, you should begin to see the first SSAE 18’s being provided by vendors.

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