Key Takeaways
- Independence Upholds Reliability: The fundamental reason for maintaining independence is to uphold public confidence in the essential assurance services provided. A lack of independence or a conflict of interest undermines the reliability of the final SOC report.
- Tools Do Not Replace Professional Scrutiny: Even when using compliance tools for evidence gathering the reviewer’s professional responsibilities do not change. The reviewer is still required to understand the organization’s system, perform a risk assessment, gather sufficient evidence, and issue an appropriate opinion.
- Specific Conflicts to Avoid: Relationships between the reviewer and a SOC tool provider can compromise independence. Conflicts arise if the tool provider promotes the reviewer (even without payment) or if the reviewer pays the tool provider for client referrals (which must be disclosed in writing).
The Importance of Independence
Understanding the importance of utilizing an independent firm like Auditwerx can have a big impact on how your organization chooses to meet compliance obligations. In certain cases, SOC 2®* tools may impact a firm’s independence when performing SOC 2® assessments.
How does that affect your organization? Let’s break down the importance of independence and maintaining professional standards when it comes to compliance assessments.
AICPA Code of Professional Conduct
All AICPA members must meet strict professional guidelines and maintain high ethical standards when performing their responsibilities. The AICPA Code of Professional Conduct outlines these obligations and provides additional guidance on the responsibilities of those in the profession to the public, to clients, and to colleagues.
At its core, the AICPA Code of Professional Conduct calls for members to maintain public confidence in their essential services and maintain high standards in the responsibility of public interest. Remaining independent is a key tenet in relation to compliance reporting.
Speak to a Compliance Specialist.
Maintaining Independence Between Assessors and Tool Providers
When it comes to partnering with, or developing SOC 2®* tools, there are some specific instances where it may negatively impact the assessor’s ability to remain independent.
| Conflict of Interest Scenario (Avoid) | Resulting Risk to Independence |
| Tool Provider Promotion/Discount: The SOC 2® tool provider promotes an assessor’s services (with or without a referral fee) or offers a discount on the assessor’s fees if engaged. | This could create a reasonable conflict of interest and undermine the reliability of the report that is delivered. |
| Undisclosed Referral Payment: An assessment firm pays a tool provider to refer users to the member. | The member should disclose the referral fee in writing to maintain transparency. |
| Blind Reliance on Tool Data: The assessor relies only on the SOC 2® tool for evidence gathering, merely signing off on the data provided by the tool. | The assessor’s professional responsibilities are not met, as the tool may not report data correctly or completely, requiring manual review. |
If a SOC 2® tool provider and an assessor enter a business relationship, the assessor chooses to rely only on the SOC 2® tool for evidence gathering, merely signing off on the data provided by the tool.
An assessor must still comply with all applicable standards, and their responsibilities do not change just because a tool is involved. The tool may not report data correctly or completely, necessitating the assessor to thoroughly review the applicable assessment standards with the service organization.
Even if the service organization being assessed utilizes a tool or if the assessor partners with tools for evidence gathering, the assessor will still be responsible for:
- Determining the proper preconditions for an engagement,
- Understanding the service organization’s system and controls,
- Performing an independent risk assessment based on applicable TSC,
- Designing procedures for the appropriate risks,
- Obtaining sufficient evidence on the operating effectiveness and design of the controls in question,
- Issuing an appropriate opinion in regard to the SOC 2® report.
At Auditwerx, We Take Independence Seriously
Auditwerx has provided high-quality SOC* solutions for almost 20 years and operates in a manner that adheres to the professional standards of the AICPA. Firms who do not operate in a properly independent manner could compromise your compliance report, incurring additional time and fees to have it redone.
Whether your organization currently utilizes SOC* tools, or if you are new to the compliance landscape, the experienced team at Auditwerx can adapt to meet your business needs while maintaining appropriate professional standards. Contact us today.
FAQs
Why does the AICPA Code emphasize independence?
The Code requires assurance professionals to maintain public confidence in their services and adhere to high ethical standards, with independence being a key element to ensure objectivity.
What happens if a reviewer relies only on a SOC compliance tool for evidence?
This creates a conflict, as the reviewer’s responsibilities—like determining proper preconditions and designing procedures—must still be performed thoroughly. The reviewer cannot simply sign off on data provided by the tool.
What are the key responsibilities of the reviewer, even when using compliance software?
Key responsibilities include: determining the proper preconditions for the engagement, understanding the organization’s system and controls, performing an independent risk assessment, and obtaining sufficient evidence on control operating effectiveness.
What is the potential consequence for an organization that uses a non-independent reporting firm?
Firms that do not operate independently could compromise the compliance report, potentially incurring additional time and fees for the client to have the entire assessment redone.
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Auditwerx Team
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