User entity
A user entity is an entity that uses a service organisation and whose financial statements are being audited. The significance of the service depends on how it affects the user entity’s information system and relevant controls. The user entity remains responsible for its own financial statements.
Worked example
A retailer outsources payroll processing to a payroll provider; the retailer is the user entity.
Common mistake
Do not use user entity as a synonym for every assurance client regardless of a service-organisation relationship.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Supporting | September 2026–June 2027 |
| ACCA | AAA (INT) | Supporting | September 2026–June 2027 |