SOC for Supply Chain

Chapter 3Performing the SOC for Supply Chain Examination

This chapter discusses responding to assessed risks, considering materiality, and other matters affecting the nature, timing, and extent of procedures the practitioner may perform to obtain sufficient appropriate evidence about whether (a) the description presents the system that was designed and implemented in accordance with the description criteria and (b) controls were effective to provide reasonable assurance that the entity's principal system objectives were achieved based on the applicable trust services criteria.

Introduction

3.1 After the practitioner has assessed the risks of material misstatement, paragraphs .20–.21 of AT‐C section 205, Examination Engagements,¹ require the practitioner to respond to the assessed risks of material misstatement when designing and performing examination procedures. Specifically, those paragraphs require the practitioner to (a) design and implement overall responses to address the assessed risks of material misstatement and (b) design and perform further procedures whose nature, timing, and extent are based on, and responsive to, the assessed risks of material misstatement.

Designing Overall Responses to the Risk Assessment

3.2 The practitioner's assessment of the risk of material misstatement provides a basis for the design and implementation of procedures that are responsive to the risk assessment. As an example, consider an entity that provides bonuses to employees ...