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IS it worth Investing in SSAE 16 Certified Data Centre

SSAE16 Certification

SSAE 16, an acronym for Statement on Standards for Attestation Engagement 16 is a regulation created by the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA), which tells whether the standards of compliance are observed by the service companies.

SSA16 certification entails an honest written description of the services provided by the organization to its customers, their goals and the time duration by which the services can be evaluated.

Meaning of Data Centre

Data Centre implies a physical or virtual repository within an organization for storing, managing and sharing information related to a particular organization. Every organization has its own data centre usually known as server room. This in turn means a restricted access area which constantly monitors server activity and network performance.

Need for SSAE16 certification

If you are a service organization that has previously undergone SAS70 type of audits, then it is the time to think of SSAE16 certification for your company. The SSAE16 certification has come into effect since June 15, 2015.

Basically SSAE16 certification is applicable to the auditing standards for financial matters of a company for its service to its customers. SSAE 16 certification comes in handy when the company or data centre has a diversified clientele insisting upon security and confidentiality of the data. However, if a data centre or company provides internal resources to its employees for the purpose of research or product development, then SSAE 16 certification would not be necessary.

The SSEA16 compliant hosting companies ensure that their services and activities have been subjected to a thorough audit and have a good control over information technology as per the highest industry standards.

SOC Reports

The comprehensive platform of Service Organization Control Reports (SOC) framework consists of SOC1, SOC2 and SOC3 reports. These are internal reports of the services rendered by a service company to the user entity for assessing and addressing the risks associated with the outsourced company.

 These SOC reports can be accessed at the managerial level for the purposes of audit of financial statements, governance risk, marketing purposes and compliance programmes.

A distinct logo demarcates service companies providing SOC1, SOC2 AND SOC3 reports and another logo for the user entities that have received SOC1, SOC2 and SOC3 reports.

SSAE 16 certification in Indian Context

With a large number of companies off-shoring their business to India in the form of BPOS, KPOs, LPOs etc, the concept of SSAE16 certification has gained tremendous importance. The parent companies or user entities, based in The United States of America, emphasise on SSAE16 certification for servicing their customers. This in turn provides reliability, data protection and competitive IT infrastructure.

Points to keep in Mind before going for SSAE 16 Certificate

  • Does your company really need SSEA 16 certification
  • Conduct an internal SSEA 16 readiness assessment.
  • Find a competent CPA firm that specialises in SOC reporting.
  • Thoroughly understand SSEA 16 certification.

Benefits of SSAE 16 Certificate

  • Builds trust with the user entity– a service auditor’s report gives a competitive edge to a service company in the market.
  • Cost effectiveness– the service company will not have to entertain multiple audit visits. Consequently, it will be pocket friendly to the service provider.
  • Improvement opportunities– SSEA 16 certification is performed by qualified and competent professionals with experience in accounting, auditing and information technology. Thus, with a diversified skill-set, it would be easier to identify opportunities for improvement in many operational areas.

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