What exactly is a SOC Audit? An In-Depth Guide to Security Operations Center Audits.

Introduction

audits that companies can undergo to ensure the security, availability, processing integrity, confidentiality and privacy of their customers’ data. The SOC control standards were created and are overseen by the American Institute of Certified Public Accountants (AICPA). The most common SOC audits are SOC 1 & SOC 2, as well as SOC for Cybersecurity.

CSAE

what exactly is a SOC Audit?

SOC audit (which is normally a SOC 2 audit, but more on that later) is an audit of your companies’ policies, procedures and technology (your controls) that are in place to help protect the data your company operates on. SOC 2 audit reports are to help ensure your customers that your systems are properly built and operating securely. When customers hand over their valuable data to service organizations to process (such as third-party printing companies, data centers or payment processors), they want to know that its being protected while it’s out of their hands. A SOC 2 audit report is a way for businesses to demonstrate that they take data security seriously and are protecting their clients’ information.

Types of SOC AUDIT

There are 3 types of soc audit

What is SOC -1 report?

When a service organization’s controls are applicable to a user entity’s internal control over financial reporting, the service organization provides a SOC 1 report to the user entity. This report outlines the service organization’s defined scope and control objectives.

There are two types of SOC 1 reports:

SOC 1 Type 1 reports focus on the service organization’s system and the suitability of its controls for achieving control objectives. These reports are typically restricted to user entities, auditors, and managers—those who belong to the service organization. A service auditor performs SOC 1 reports that cover the requirements of Statement on Standards for Attestation Engagements No. 16.

SOC 1 Type 2 report, which has the same analysis and opinions as a Type 1 report, but also includes views on the operating effectiveness of pre-established controls designed to achieve all related control objectives established in the description over a specified period.

This report discusses the control objectives that could affect the organization’s financial reporting. The report covers all of the relevant domains and provides assurance that only authorized individuals are involved in financial reporting. It also ensures that they are limited to appropriate actions.

 What is SOC – 2 reports?

SOC 2 reports provide information about the controls at a service organization relevant to the data processed and stored by the service provider’s system. The five trust services criteria categories are security, availability, processing integrity, confidentiality, and privacy.

  • Security
  • Availability
  • Processing Integrity
  • Confidentiality, and/or
  • Privacy

SOC 2 Type 1 – A SOC 2 Type 1 report is an audit that examines the design of a company’s information security controls and how they are implemented. The report also evaluates the effectiveness of those controls in protecting customer data. SOC 2 Type 1 audits are performed by independent auditors who are licensed to perform SOC 2 audits.

When looking for business partners, service organizations should aim to be SOC 2 Type 1 compliant. This is because bigger companies are more likely to partner with entities that have a SOC 2 Type 1 report prepared by a reliable auditor. In other words, compliance with this auditing procedure gives a service provider a competitive advantage.

 

SOC 2 Type 2 – While SOC 2 Type 1 compliance is important, complying with SOC 2 Type 2 is even more beneficial. SOC 2 Type 2 compliance provides a higher level of assurance than SOC 2 Type 1. In order to achieve this level of compliance, a company must carefully examine its internal control policies and practices over an extended period of time under the supervision of an auditor.

 

A SOC 2 Type 2 report sends a message to potential customers that a service firm applies the best practices on data security and control systems. Service entities with this compliance are more likely to win contracts from bigger firms. SOC 2 Type 2 looks at the five trust principles of data processing and storage- availability, confidentiality, security, privacy, and processing integrity.

Passing the SOC 2 Type 2 audit can be a distinguishing factor for service providers, as it requires significant investment not only in capital but also working hours. However, it is important to remember that this type of audit goes beyond compliance and is instead focused on good governance and security.

 What is SOC -3 Report?

The SOC 3 report is based on the Auditing Standards Board of the American Institute of Certified Public Accountants’ (AICPA) Trust Service Criteria (TSC). The SOC 3 is a public report of the controls your company has in place over security, availability, processing integrity, and confidentiality.

SSAE 18 / ISAE 3402 Type II is an assurance standard that covers engagements performed by service organizations. SSAE 18 was designed to be aligned with the International Standard on Assurance Engagements 3402 (ISAE 3402).

SSAE 18 and ISAE 3402 are used to generate a report by an objective third-party attesting to a set of assertions made by an organization about its controls. The Service Organization Controls (SOC) framework is the method by which the control of financial information is measured.

Google Cloud undergoes a regular third-party audit to certify individual products against this standard. Our SOC 3 reports for Google Cloud Platform and Google Workspace are available for download instantly.

 

Difference between Soc 1 and Soc -2     

SSAE 18 and ISAE 3402 are used to generate a report by an objective third-party attesting to a set of assertions made by an organization about its controls. The Service Organization Controls (SOC) framework is the method by which the control of financial information is measured.

Google Cloud undergoes a regular third-party audit to certify individual products against this standard. Our SOC 3 reports for Google Cloud Platform and Google Workspace are available for download instantly.

Anyone interested in the results of a SOC 1 report could be executives (financial) at the user organization, financial auditors of the service org, or compliance officers. A Type I SOC 1 report includes a description of controls (which is the design of the controls) at a service organization as of a specified date. A Type II SOC 1 report includes the same opinions on the description of controls, but it also includes an opinion on the operating effectiveness of controls over a specified period of time.

SOC 2 Reports are also known as SSAE 18 reports. They fall under the same standard as SOC 2 reports, but are specifically addressed in sections AT-C 105 and AT-C 205. SOC 2 reports include a service organization’s controls that are outlined by the AICPA’s Trust Services Criteria (TSC), that are relevant to its services, operations, and compliance. There are five available criteria that include security, availability, processing integrity, confidentiality, and privacy.

There are two types of security criteria: the common criteria and the specific criteria. The common criteria is the only required criteria to be included in a SOC 2 report. The difference between SOC 1 and SOC 2 is that in a SOC 2 report, the controls meeting the common criteria are identified and tested, whereas in a SOC 1 report, the controls meeting the identified control objectives are tested.

So, what’s the main difference between a SOC 1 report and a SOC 2 report? A SOC 1 report looks at a service organization’s controls that are relevant to its clients’ financial statements. A SOC 2 report, on the other hand, looks at a service organization’s controls that are relevant to its operations and compliance, as outlined by the AICPA’s Trust Services Criteria (TSC).

Difference between soc 2 and soc 3 .

The SOC 2 and SOC 3 reports are governed by the same AICPA standards, so the work performed by the service auditor for these two reports is very similar. Both reports are designed to address the AICPA TSCs, so the controls identified and tested by the service auditor are typically the same for both reports. The key difference in these reports is in the reporting.

There are two types of SOC 2 reports: Type I and Type II. Type I reports are restricted use and intended for the use of the service organization’s management, customers, and their customers’ auditors. SOC 3 reports, on the other hand, are general use reports that can be distributed freely by the service organization. They contain significantly less detail in the report itself.

Service organizations make their SOC 3 reports available to the public on their website, whereas customers must request a copy of the SOC 2 report from the service organization. Unlike SOC 2 reports, SOC 3 reports do not have a detailed description of the controls tested by the service auditor, the test procedures and the results of the test procedures. A SOC 3 report typically contains a short auditor’s opinion, management assertion and system description.

A SOC 3 is a great marketing tool for potential customers, but it would not typically satisfy the needs of current customers and their auditors. The report does not go into much detail on how the system operates or the results of tests conducted.

Many clients choose to obtain a SOC 2 and a SOC 3. The cost for performing these reports is about the same, so it often makes more sense for customers to obtain a SOC 2 and add on a SOC 3 for an incremental fee.

ISO 9001 Audit

Conclusion

The SOC audit is a comprehensive evaluation of a company’s security operations center. The audit is conducted by the American Institute of Certified Public Accountants (AICPA) and covers a wide range of areas, including the security, availability, processing integrity, confidentiality and privacy of customer data. The most common SOC audits are SOC 1, SOC 2, and SOC for Cybersecurity.