Key Takeaways
Client Trust and Expectation: Current and prospective clients expect service organizations to provide an independent, third-party validation (SOC* report) of their policies, procedures, and internal controls in areas like IT, data security, and transaction processing.
Competitive Market Advantage: In a competitive landscape, offering a SOC* report can differentiate your business. Organizations that provide this assurance are better positioned to win new prospects and avoid losing ground to competitors who already have their controls validated.
Internal System Insight: Beyond external client assurance, undergoing a SOC* engagement provides management with valuable internal insights. The independent review identifies controls’ strengths and weaknesses based on objective standards, helping executives pinpoint and resolve systemic problems.
The Purpose of a SOC* Report
You might be wondering why your business needs a SOC* report in the first place. It’s important to give your business every advantage in a competitive market, and a SOC* report can help instill trust with current or perspective clients.
4 Reasons to Consider a SOC* Report
- Your Clients Expect It – Your clients expect you to provide them with an assessor’s
opinion about your policies, procedures, and controls in the areas of IT, data security, and transaction processing. - Your Systems Need It – While customers value the assurance that a SOC* report provides, businesses that undertake a SOC* engagement gain valuable insights into their controls’ strengths and weaknesses. These independent third-party reviews are based on an objective set of standards to help executives identify systemic problems.
- Your Competitors Could Beat You to It – In a competitive market, you can’t afford to cede an advantage to your competition. Even if your business hasn’t encountered a client that requires you to provide a SOC* report yet, you are may either be losing ground to competitors who already offer them or failing to press an advantage over competitors who don’t.
- Your Industry Demands It – SOC* reports deliver a wealth of information about your business to clients, prospects, competitors, and regulators. Not only do they provide evidence of compliance with AICPA standards, but they also offer a map to federal standards like NIST and HIPAA. With so much of today’s business transacted electronically, leadership in any sector will require a commitment to rigorous controls.
Speak to a Compliance Specialist.
Your SOC* Compliance Partner
We understand the uncertainties you face in starting what can seem to be a daunting process. Our team of professionals will work with you to walk you through each step of the process by explaining the requirements and helping you outline and identify the controls you have in place in your organization.
We provide this in a remote, project-based process that helps you see what is needed and what comes next in the process. We know you have your daily tasks to focus on, and we can work around your availability to ensure the least amount of disruption so you can focus on what is important—your business.
If you are ready to get started on your SOC* journey, contact us today to speak to a specialist about your reporting needs.
FAQs
Why do clients require their vendors to provide a SOC* report?
Clients require a SOC report to manage their own risk, specifically vendor risk. The report provides them with an independent opinion that the service organization’s controls over data security, IT systems, and transaction processing are designed and operating effectively, instilling necessary trust in the relationship.
How can a SOC* report give a business a competitive edge?
A SOC report provides a significant competitive advantage by demonstrating a commitment to rigorous controls and data security. By proactively providing this evidence of compliance, a business can stand out in the marketplace and secure new contracts with organizations that prioritize secure vendor relationships.
Does a SOC* engagement provide benefits beyond external validation?
Yes. While providing client assurance is a major goal, the internal process of a SOC engagement is highly beneficial. It forces management to undertake a rigorous review of their own systems, procedures, and control environment, helping to uncover hidden weaknesses and implement stronger security practices.
How does a SOC* report relate to other industry compliance standards?
SOC reports demonstrate adherence to the AICPA standards for control over service organizations. In addition, the information contained within these reports often provides a map showing compliance with other critical federal and industry standards, such as NIST (National Institute of Standards and Technology) or HIPAA (for healthcare data).
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