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Moving from SAS 70 to SSAE 16: seize the opportunity

Most service firms (like payroll and healthcare claims processors) have provided a SAS 70 report to their clients simply as a matter of course. Over time these CPA reports on the service organization’s internal controls have evolved from being solely an auditor-to-auditor communication to include information about risks beyond financial reporting, and in some cases they’re being used as a marketing tool.

As of June 15, SAS 70 reports were replaced by SSAE 16 reports. There are any number of publications and opinions about the transition (just ask Google), but it strikes me that there is an opportunity here to take a fresh look at the value of these reports. I’ve seen a tendency to for companies to include SAS 70 reports in the SOX controls only because they are available, and my guess is that there are probably quite a few them with other controls that cover the same bases. On the flip side, the SAS 70 might not address risks that need additional work to mitigate, or the business has changed and the risks are no longer consequential.

So, take a closer look at past SAS 70 reports and determine if you’re actually relying on them for your internal control environment. If you don’t need to include them in your SOX controls—don’t. (That will apply to the SSAE 16 as well.) You’ll save time and possibly a bit of money.

This is not to say there is no value to the SAS 70 or SSAE 16 report if you don’t need it for SOX. Companies just need to ask themselves whether that value is as a SOX control or for other operational or risk mitigation purposes. Seize this opportunity, and at the very least you’ll have a good understanding of your controls environment.

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We’ve got a new practice: XBRL!

Having been in the trenches with XBRL since it came on the scene, we’re pleased to announce the launch of our dedicated XRBL practice. Sure, it’s a business opportunity for us, but we believe we can go above and beyond. We’ve seen what companies are going through to comply, have a whiteboard full of best practices from phase-in groups, and we’ve helped our clients both do it right and benefit from it. XBRL is a necessary evil (sort of like SOX used to be), but with it comes the chance for companies to really take ownership of their data, and make sure their information is accurate, transparent and comparable to everyone who uses it.

Our chief XBRL guru is Lucy Lee, a newcomer to RoseRyan but an experienced hand at XBRL and compliance issues. She’s developed a six-step XRBL methodology, with quality assurance at its core, that we’ll use in every engagement. XBRL implementation is relatively new and still changing, but we stay on top of the rules updates and Edgar Filer Manual changes, including SEC guidance and most common errors. We can help with every aspect of XBRL implementation (not something everyone can claim), and when we’re done, we often leave companies with a more streamlined close and reporting process.

You can learn more about our new XBRL practice in our press release and in the Services section of our website.

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Help take the pulse of cleantech in Northern California

Part of Northern California’s cleantech industry? I invite you to take RoseRyan’s annual State of Cleantech survey, designed to take the pulse of this growing and influential sector and provide an insider’s view of what’s important and where it’s headed. There are 19 questions; it should take 10–15 minutes to complete. The deadline is July 29. You’ll find the survey here.

The questions cover far-ranging aspects of business and finance, including how many IPOs and M&As expected in the coming year, which cleantech sectors are predicted to do the best, and top business challenges and market risks for the year ahead. Our partners this year are Arbor Advisors, Barney & Barney and KPMG.

In last year’s survey, optimism prevailed—surprising, since it was set against the backdrop of the end of one of the most severe recessions in history. Respondents’ eyes were on opportunities in China, but there was also lots of concern about gaining access to capital and the decline of government incentives. What will shift in 2011? I’m very much looking forward to finding out.

Thanks in advance for your help. Please share it with other leaders in the field. And please feel free to let me know what you think about the survey itself, via the survey itself (there’s plenty of room for comments) or just send me an email (cvane [at] roseryan.com). We plan to release the results in August.

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