The latest update to the Statement on Standards for Attestation Engagements (SSAE)—a set of standards applying to compliance reporting, issued by the Auditing Standards Board (ASB)—came into effect recently. If your contract requires certain reports from service providers, you may need to update your contractual language to reflect ASB's changes under this recent update (SSAE 18).
Frequently, contracts with service providers for certain services require the service provider to retain an accounting firm to perform specific audits and to deliver the results of such audits or a report thereof. Based on the SSAE 18, the audit language related to such audits may need to be updated. For example, if your audit language requires service organization control (SOC) 1 reports conducted under the SSAE 16 standards, this language is now out of date. As of May 1, 2017, SOC 1 reports will be issued under SSAE 18, which redrafts all of the prior SSAE versions, with a few exceptions. Going forward, an "SSAE 16/SOC 1 report" should be referred to as an "SOC 1 report" in your contracts, removing the reference to SSAE 16.
While many experts are not characterizing the changes in SSAE 18 as major developments, it is still important to discuss these changes with the relevant professionals and to determine whether your contracts' audit language needs to be updated.