The background of ISAE 3402

The pension and insurance industry

Since 2004, the demand for reports on outsourcing has increased, partly due to developments in the pension and insurance industry. In the Netherlands, the market chose to use the SAS70 standard as a normative framework for these types of reports. As SAS70 was an American standard, demand for an international standard brought about the ISAE3402 standard that replaced SAS70 from June 15, 2010.

In the early years of using SAS70, many organizations completed SAS70 type I reports to show that they were SAS70 certified. Auditors of pension funds gave rise to the demand for more certainty over a specific period, for which the SAS70 type II standard was developed.

The Corporate Governance Institute

On March 19th in 2009, the Corporate Governance Institute was founded in order to promote transparency in financial markets. Its first initiative was the SAS register, where SAS70 reports were registered. The success of this register caused the initiation of and an ISAE3402 register in the United Kingdom.

In the UK the demand for ISAE3402 reports has increased with the downfall in demand for the AAF 01/04 standard. Consequently, user organisations almost always request ISAE3402 type II reports over a period of twelve months. A report that is over a year old has little additional value for the organization.