Outsourcing
Outsourcing is engaging an external provider to perform a process or service for an entity. In an audit, outsourced accounting, payroll or internal audit services can affect risks, controls and evidence. Responsibilities and independence requirements depend on who performs the service and its nature.
Worked example
A company outsources payroll processing; its auditor assesses relevant service and user-entity controls.
Common mistake
Outsourcing a process does not transfer management’s responsibility for the financial statements.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Supporting | September 2026–June 2027 |
| ACCA | BT | Direct | September 2026–June 2027 |
| ACCA | SBL | Direct | September 2026–June 2027 |
| FIA | FBT | Direct | September 2026–June 2027 |