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System and Organization Control reports (SOC), provide insight into how a particular process is conducted. They also provide insight into whether the internal controls are adequate to maintain the desired level of accuracy, completeness or relevance when focusing on business processes. If you are concerned about information technology, SOC reports help assure that a control frameworks exist around the following criteria security, availability, processing integrity, confidentiality, privacy or other topics.
Also, SOC reporting helps build trust with stakeholders by demonstrating that appropriate controls are in place for your business processes and information technology.
Here are some examples of how a SOC report may be used:
●Customer request: If a current or prospective customer wants you to demonstrate your ability to meet service commitments or system requirements effectively, or that you have the right customer protections in place, a SOC 2 or SOC 3 report can help build confidence.
●Reduce audit requests: If your current customers require audit support for their controls over financial reporting related to your system, a SOC 1 report can reduce the burden of compliance from many unique requests made by many unique customers to a streamlined report upon which all your customers can rely.
●Management internal evaluation: Management can request an independent audit to understand whether the controls and security framework they have in place are operating as expected.
The key benefit of a SOC examination and report is to demonstrate an understanding of both the process and the risks, as well as the suitability of design and operating effectiveness of controls. On the other hand, there are three primary types of SOC reports, each tailored to address different aspects of these processes:
SOC 1
Primarily address controls relevant to financial reporting; it assures that the controls in place help maintain the accuracy and completeness of financial data. For businesses providing services that affect their customers’ financial statements, a SOC 1 report can streamline compliance efforts by providing standardized reports that multiple customers can rely on.
SOC 2
These reports delve into controls related to the AICPA trust services principles: security, availability, processing integrity, confidentiality, and privacy. SOC 2 are often applicable for technology service providers.
SOC 3
Designed for public distribution, SOC 3 covers the same areas as SOC 2 reports and can be available for the general public on websites and marketing materials. These reports showcase a business’ commitment to security and privacy practices, thus building trust with potential customers.
As a service organization, you know how important it is to produce a report for your customers and their auditors that instills confidence and enhances their trust in your services. Kevane Grant Thornton Advisory professionals can help you determine which report(s) will satisfy your customers’ needs and provide relevant information to your customers and customers’ auditors that will be a business benefit to you. Contact us for more information: kgt@pr.gt.com