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A systematic examination of financial or accounting records by a specialized inspector, called an auditor, to verify their accuracy and truthfulness. A hearing during which financial data are investigated for purposes of authentication.

The Internal Revenue Service (IRS) conducts two types of audits, called examination of taxpayer returns, and they are typically conducted using one of two types of procedures. The most common auditing procedure involves correspondence between the service and the taxpayer or interviews with the taxpayer in a local IRS office. A less common method involves field audits whereby IRS officials conduct the audit at the taxpayer's home or place of business. Treas. Reg. § 601.105(b)(1). The service determines which audit procedure should be followed in a particular case. During an audit, an IRS official may question the taxpayer about a particular transaction or transactions that appear on the taxpayer's return or may conduct a thorough investigation of the taxpayer's entire tax return.

Although many people fear audits by the IRS, the percentage of returns examined by the IRS is relatively low. For example, of 108,034,700 returns filed by taxpayers in 1997, the IRS examined 1,662,641, or about 1.5 percent of the total number of returns. Despite this low number, several stories surfaced in the 1980s and 1990s regarding abuses by IRS officials, many of which occurred during the audit process. Congress responded by enacting two "Taxpayer Bill of Rights," first in 1989 and again in 1996. The second act, the Taxpayer Bill of Rights 2, Pub. L. No. 104-168, 110 Stat. 1452, established and delegated authority to the Office of Taxpayer Advocate. This office is responsible for assisting taxpayers in resolving problems with the IRS, identifying areas where taxpayers have had problems with the service, and identifying potential legislative and regulatory changes that could mitigate problems between the IRS and taxpayers.

Further readings

Baran, Daniel J. et al. 1997. IRS Audit Protection and Survival Guide. New York: Wiley.


Internal Revenue Service.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.


n. an examination by a trained accountant of the financial records of a business or governmental entity, including noting improper or careless practices, recommendations for improvements, and a balancing of the books. An audit performed by employees is called "internal audit," and one done by an independent (outside) accountant is an "independent audit." Even an independent audit may be limited in that the financial information is given to the auditor without an examination of all supporting documents. Auditors will note that the audit was based on such information and will refuse to sign the audit as a guarantee of the accuracy of the information provided. (See: auditor)

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
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There are two types of SAS 70s. Type I allows service organizations, such as an ASP, to demonstrate that their control activities and processes are adequate to protect their clients' transactional data at a specific point in time.
SAS 70 gives guidance to the auditor of the organization using the service (user auditor) and the auditor of the organization providing the service (the service auditor).
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With facilities in California and Dallas, Texas, FSSI is a SAS 70 Type II certified provider of outsourced statement and invoice production, electronic statement presentment, and compliance-letter management.
The infrastructures are housed in its data centre partner, FORTRUST's, high availability, SAS 70 Type II facility, the company said.
During his 18-year career, Bernard has successfully conducted a variety of Information Technology (IT) audits, assurance and business advisory services, including general controls reviews for Sarbanes-Oxley (SOX), Model Audit Rule (AFRMR), and SAS 70 / SSAE 16 engagements, as well as IT security assessments and IT operation reviews.
TELECOMWORLDWIRE-3 December 2008-ePlus inc awarded second SAS 70 Type II accreditation for eProcurement and Content Management solutions(C)1994-2008 M2 COMMUNICATIONS LTD
She has extensive experience with SAS 70 audits/SSAE 16/AT 101, internal and external audits, and specialized projects for application reviews, internal and external vulnerability assessments, wireless assessments and penetration testing.
Oasis is accredited by the Employer Services Assurance Corp., ensuring the highest level of ethical, financial and operational standards in the PEO industry and has received SOC 1 Type II (formerly SAS 70) certification for its high level of accuracy and performance.
"For the past 9 years Chetu has successfully obtained SAS 70 Type II audit and certification, one of the most stringent auditing standards for service organizations.
Kerio Cloud is built on an SSAE 16 / SAS 70 and PCI audited fully managed private data center.