- This topic has 1 reply, 2 voices, and was last updated 5 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for June 2024 exams, Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Type 1 & Type 2 report
What is a type 1 & type 2 report please. I need a simplified explanation of what they are, when they are used & what for please. I gathered that they have to do with outsourcing but still not clear.
ty
If Co A (your client) outsources a finance function (e.g. payroll) to a service provider (Co X), Co A (and you) will need assurance that the control objectives relating to payroll are being achieved. You cannot audit Co X (nor can any of the auditors of Co X’s numerous clients). So Co X commissions an assurance report which is then made available to its numerous clients and their auditors. This assurance report may be Type 1 (describing the controls) or Type 2 (providing assurance that the controls have operated effectively throughout a specified period).
These reports are described in more detail on page 91 of the notes.