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The US and UK attestation standards (SSAE vs. ISAE).

Understanding Attestation Standards: A Comparison of SSAE (US) and ISAE (UK)

Attestation standards play a pivotal role in ensuring the integrity, reliability, and transparency of financial and non-financial information in organizations worldwide. In the United States (US), Statement on Standards for Attestation Engagements (SSAE) is the recognized framework, while in the United Kingdom (UK), International Standard on Assurance Engagements (ISAE) is the corresponding standard. In this blog, we'll delve into the key differences and similarities between SSAE and ISAE, helping you understand their implications for auditing and assurance processes.

SSAE (US Attestation Standard)

1. Developed by AICPA:

  • Authority: SSAE is developed and maintained by the American Institute of Certified Public Accountants (AICPA), a leading professional organization for accountants in the US.

2. Focus:

  • Scope: SSAE covers a wide range of attestation engagements, including audits of financial statements, reviews of financial statements, and various other forms of assurance engagements.
  • Financial and Non-Financial: It applies to both financial and non-financial information, making it versatile for different types of engagements.

3. SSAE No. 18:

  • Update: SSAE No. 18, titled "Attestation Standards: Clarification and Recodification," was introduced to clarify and enhance the standards for attestation engagements.

ISAE (UK Attestation Standard)

1. Aligned with ISAs (UK & Ireland):

  • Relation: ISAE is closely aligned with International Standards on Auditing (ISAs) applicable in the UK and Ireland. ISAs are international auditing standards adopted by many countries.

2. Focus:

  • Scope: ISAE primarily focuses on assurance engagements that do not involve historical financial information, unlike ISAs that primarily cover audits of historical financial statements.
  • Non-Financial: It is particularly suited for assurance engagements related to non-financial information, such as environmental reports or sustainability disclosures.

Key Differences and Similarities:

Scope:

  • SSAE: Covers both financial and non-financial information and a broader range of assurance engagements.
  • ISAE: Primarily focuses on non-financial information and assurance engagements other than historical financial statements audits.

Development Authority:

  • SSAE: Developed by AICPA in the US.
  • ISAE: Closely aligned with ISAs in the UK and Ireland, which adhere to international auditing standards.

Historical Financial Statements:

  • SSAE: Applicable to audits of historical financial statements.
  • ISAE: Primarily for assurance engagements not involving historical financial statements.

Adoption Beyond Jurisdictions:

  • SSAE: Commonly used within the US but may be adopted for some international engagements.
  • ISAE: Used in the UK and Ireland, with potential for broader international adoption due to alignment with ISAs.

Update and Clarity:

  • SSAE No. 18: SSAE underwent an update to enhance clarity and address changes in the audit landscape.
  • ISAE: Continues to align with ISAs for international consistency.

Choosing Between SSAE and ISAE:

The choice between SSAE and ISAE depends on several factors, including the nature of the assurance engagement, geographical location, and the specific requirements of the client or regulatory authorities. Organizations and auditors need to consider these factors to select the appropriate framework to meet their assurance needs effectively and in compliance with local and international standards. Understanding the differences and similarities between SSAE and ISAE is essential for making informed decisions in the world of attestation and auditing.