System & Organization Control (SOC 1 & SOC 2) & International Standard on Assurance Engagements (ISAE 3402 & ISAE 3000).
Known among organizations and businesses as the gold standard for system and organization controls, this standard assures stakeholders of the security and sustainability practices of the company. Service providers have to take great pains to differentiate themselves from their competition. For this, it becomes more important than ever to showcase that your business conducts operations effectively with internal controls in place.
This standard was originally developed by the American Institute of Certified Public Accountants. It brings to fore an assessment and reporting service designed to ensure that the customer data is managed responsibly. This standard brings with it a comprehensive list of criterion to help the organization identify its security readiness and overall system suitability.
| PURPOSE | INTENDED USERS | FOCUS ON | REPORT TYPE | EVALUATES | |
| SOC1 | Audit of Financial Services | Financial Statement, Auditors, Customers Related Third Parties | Internal controls relevant to financial reporting | Type 1
Type 2 |
Design of Internal Control
Operating effectiveness of Internal Control during the review period |
| SOC2 | GRC Programs, Oversight, Due Diligence | Management, Regulators, Related Third Parties | Operational controls regarding security, availability, processing integrity, confidentiality or privacy | Type 1
Type 2 |
Design of Internal Control
Operating effectiveness of Internal Control during review period |
| SOC3 | Marketing or General Purpose | Anyone with need for confidence in service organisation’s controls | Easy to read report on controls | General | Design of controls related to SOC2 objectives |
There are essentially two types of SOC reports – SOC 1, which focuses on the financial reporting controls and SOC 2 which is based on how securely a company handles the data that comes its way. SOC 2 takes into consideration everything related to data security, right from people, processes to infrastructure and software.
One of the primary things required by the stakeholders of any organization is transparency and trust. Considering the importance of risk management in today’s day and age, businesses devote a large amount of time and resources toward assuring their stakeholders.
The SOC certification offers a process where a single assessment will provide them with all the information required to share with all their stakeholders.
SOC reporting can save on time by doing away long audits and filling questionnaires by vendors and money by saving on compliance costs.
It helps the business create a rapidly adaptable reporting that meets all the requirements and concerns of the market and addresses the risks for an organization proactively and ensures greater trust and transparency on part of the organization for the stakeholders.
Applicability of SOC
Does your organization endure high volumes of client and stakeholder requests for assurance?
Does your company need assurance from the vendors that handle your sensitive data?
This standard is crucial for companies, and organizations dealing with large quantum of data. If you are a service organization and are commonly facing audit requests from customers this could be the perfect certification to ensure you save on time and money, while also assuring security to all your stakeholders.