What is Service Organization Control (SOC)?

Service Organization Control Reports, in short, are helpful for different businesses. These statements and reports contract out other business responsibilities like medical claims, payrolls, and managing the company portfolio. 

Typically, these are segments and parts of a business that a company cannot do itself, so they outsource these services. It helps the company concentrate on other segments and aspects of the industry and allows the business to flourish and to focus on the business's essential elements. The Service organization audit and control comes in various forms.

In this writing piece, we will discuss different types of reports in detail, and we will tell why to choose SOC over any other reports. To best know how it operates, it is crucial to know about the system and things that came before SOC.

SEO audit, which is based on SOC, is divided into two categories. These types are SOC 1 and SOC 2, which are usually applied in relation to MS cloud services.

SOC 1 Audit

A SOC 1 audit is for CPA multinationals and corporations that audit financial statements, assess the efficiency of a CSP's interior controls that affect the financial reports using the service provider cloud services.

These audits are performed as per the law and regulations. The Laws under which such audits are done is Statement on Standards for Attestation Engagements and International Standard for Assurance Engagements.

SOC 2 Audit

A SOC 2 audit instruments the efficiency of a CSP's system built on the AICPA Trust Service Principles and Standards.

After a SOC 1 or SOC 2 audit, the service examiner gives his/her view on the SOC 1 and SOC 2 audit report, which defines the CSP's organization and evaluates the CSP's transparency report and other controls.

 They also tell whether the CPS's control is planned aptly, whether they were in operation on the designated date, and tell us about their process and effectiveness over a particular time.

SOC 3 Audit

After SOC 1 and SOC 2 audits are performed now, it is time to conduct SOC 3 audits. Auditors also create a SOC 3 report — It is a shortened version of the SOC 2 Type 2 review statement. 

This report is intended for users who want to guarantee the CSP's controls but don't require a complete SOC 2 audit report. A SOC 3 report is considered if the CSP has a malign audit opinion about the SOC 2.

Service audits help outsource the services of the organization relating to financial statements. For users of this service, it is excellent! such services save you time and reduce the risk of costs while doing your computing.

Bottom Line

Nevertheless, the increase in outsourcing did not eradicate the potential risk related to sending sensitive papers elsewhere. Suppose a security breach happens in the company or organization. The company has a lot to lose from this breach due to a security breakdown. 

If you get into the wrong hands due to leaking or break, the confidential information and documents could seriously hinder the corporation's reputation. Therefore, many companies demand more assurance from SOC service providers.