SAS 70

Sep 17 2008   3:35PM GMT

Risk Assessments and the SAS 70 audit

Keith Harrell Profile: SAS70ExPERT

Management’s risk assessment process is required to be audited in a SAS70 examination; however, in my experience, most auditors do not adequately review Management’s risk assessment process. Without adequate auditing experience, most auditors would not have a basis to determine if Management had reviewed the control risk universe. In addition, Management mostly does not formally document risks, but they are discussed only in Board meeting with among C-level executive’s. The COBIT risk assessment framework can provide Management with the criteria and the details that an inexperienced auditor may use as a guide to examine their risk assessment process


COBIT consists of information that is required to help achieve business objectives. You must first begin with a vulnerability analysis of your business operations. Then determine the threats to these vulnerabilities For example, your greatest risk may be related to the legal liabilities due to incorrect financial statements….. or something more simpler, like loss of a backup tape which contained your customers social security numbers. Third, determine the impact of this threat. Is it a million dollar monetary fine, or could your license to conduct business be taken away. The conclusion is an action plan after which the cycle can start again.


When the SAS 70 auditor discusses your risk assessment process, don’t be afraid to say that you have it all stored in your brain. Without risk documentation, an experience auditing firm will assist you in forming a roadmap of risks that lead to your business success. Mr. CIO, have you determine what are your business risks or your information technology risks today? Have you formally discussed and evaluated them with other c-level executives or with your peers and association’s within your industry. Note from the diagram below the a formal risk assessment process. Next time we will discuss each of these layers in detail.




and Valuation






















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