Operating effectiveness

Operating effectiveness
See also


Operating effectiveness - the yield allowing an organization to convert, utilize minimal resources, (inputs) into maximum products (outputs) by factors like reducing defects in products, the cost or waste of time, energy, developing better products faster.

Evaluating the Operating Effectiveness of Controls at a Service Organization

When the user auditor's risk assessment includes an expectation that controls at the service company are operating efficiently, the user auditor should receive audit evidence concerning the operating effectiveness of those controls from one or more of the following procedures [1]:

  • receiving and reading a SOC 1 Type 2 report, if obtainable
  • performing appropriate tests of controls at the service organization
  • using another auditor to perform tests of controls at the service organization on behalf of the user auditor.

Design vs Operating Effectiveness

Audit Evidence Should Support Your Design and Implementation Operating Effectiveness
Understanding of how the control is designed X X
Evaluation of whether the design is effective X X
Determination that the control procedure has been implemented X X
Understanding of how the control procedure was applied throughout the period X
Determination that the control was applied consistently throughout the period X
Understanding of who or by what means the control was applied throughout the audit period [2] X

References

Footnotes

  1. AICPA 2016, p. 250
  2. AICPA 2016, p. 165

Author: Klaudia Wojtas