The Hindu Business Line : E&Y evolves auditing standard for services companies

"It will soon be the de-facto standard," said Mr Kenneth L. Vander Wal, Partner, Technology and Security Risk Services, Ernst & Young LLP Assurance and Advisory Business Services, on the sidelines of a customer meet in the city.

SAS (Statement on Auditing Standard) 70 is a standard that offers information about controls at a service organisation that affect the client's financial statements. It offers independent assurance to the client about the service organisation. With this report, the company can eliminate the need for their clients to review them. SAS 70 follows a limited distribution model and only potential customers and regulators are granted access.

Given the size of BPO and ITeS companies in India servicing US organisations, regulatory and compliance standards will gain importance, said Mr Sunil Chandiramani, Partner, Ernst & Young India. "They are only now recognising the need and importance of compliance," said Mr Wal.

A SAS 70 enterprise-wide report costs between Rs 20,000 and Rs 1 crore. "From the perspective of a company's budget, this is not a significant price," said Mr Wal. The value it will bring is worth it. Such certificates give service providers an edge in gaining customers.

A unique feature of SAS 70 is that it requires sub-services to be identified. "This will bring in transparency to the client," said Mr Chandiramani. It will also clarify ownership, and assign responsibility to each company offers a sub-service.

A new trend in compliance is the protection of personal information.

"There should not be a compromise of a client's or employee's personal information," said Mr Wal. By 2010, Indian companies will hold 46 per cent share of the global ITES market and 65 per cent in the IT outsourcing market.