Subservice Organization
Subservice Organization: A subservice organization is a service organization employed by a service organization to process, record and report financial data for its user entities. The services provided to user entities are likely to be relevant to those user entities’ internal controls over financial reporting as define in paragraph 7 of SSAE No 16. A service organization complying with SSAE No. 16 is not required to consider a subservice organization that does not comply with the requirements for a subservice organization as defined by SSAE No. 16. In the management’s description of the service organization’s system it may elect to use either the carve-out method or the inclusive method in its discussion of the services provided by a subservice organization.
