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auditors have no right to access information held by third parties.If a client uses a service organisation , is it fair to say that it is inherently risky?especially at the planning stage.Even before considering materiality of the transactions performed by the service organisation?
Yes, I could see that is a valid point
However, in practice, such is the competitive nature of the service organisation industry that most (if not all) offer the facility of access to the auditors of those entities for whom they provide a service
In an answer I would be tempted to say something like (if it fits the context of the question):
“The auditor should ensure that the client’s contract with the service organisation allows for freedom of access to the client’s records held by the service organisation. If this isn’t the case there is a strong possibility of the auditor being unable to accumulate sufficient appropriate evidence concerning some material matters relating to the client’s affairs”
OK?
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