What are SOC reports?

SOC reports, or System and Organization Controls reports, are detailed documents that provide valuable information about a service organization’s internal controls and processes. These reports are typically prepared by independent auditors and are used by organizations to assess the effectiveness of their controls, as well as by customers and stakeholders to evaluate the service organization’s security, availability, processing integrity, confidentiality, and privacy.

There are three main types of SOC reports:

1. SOC 1: This report focuses on controls relevant to financial reporting. It is used by service organizations that provide services that impact their clients’ financial statements. SOC 1 reports are typically conducted in accordance with the SSAE 18 standard and are commonly used by financial institutions, insurance companies, and other organizations that rely on outsourced services.

2. SOC 2: This report focuses on controls related to security, availability, processing integrity, confidentiality, and privacy. SOC 2 reports are conducted in accordance with the AT-C 205 standard and are used by service organizations that handle sensitive customer data, such as data centers, cloud service providers, and SaaS companies. SOC 2 reports are often requested by customers during the vendor selection process to ensure that the service organization has adequate controls in place to protect their data.

3. SOC 3: This report provides a high-level overview of the service organization’s controls and can be publicly shared. SOC 3 reports are designed for organizations that want to provide assurance to their customers and stakeholders without disclosing sensitive information. SOC 3 reports are based on the same criteria as SOC 2 reports but are less detailed and do not include the detailed description of the service organization’s controls.

In addition to these three main types of SOC reports, there are also SOC for Cybersecurity reports, which focus on the service organization’s cybersecurity risk management program. These reports are designed to provide stakeholders with information about the effectiveness of the service organization’s cybersecurity controls and processes.

Overall, SOC reports are valuable tools for service organizations to demonstrate their commitment to security and compliance, as well as for customers and stakeholders to evaluate the effectiveness of a service organization’s controls. By obtaining SOC reports from their service providers, organizations can gain confidence that their data is being handled securely and in accordance with industry best practices.