Why do I need a SOC 1 Report?
Do you need to present a SOC 1 report but you have no idea what it means? Have you ever wondered what makes it necessary and how you can go about getting one? Read along, and we will take you from newbie to informed.
What is a SOC Report?
The term SOC report stands for System and Organization Controls Reports. Introduced by the American Institute of Certified Public Accountants (AICPA), a SOC report ensures that service providers operate in an ethical and compliant manner. If you want to make sure that all your customer’s and employees’ data are safe, getting a SOC report is a major step in the right direction. A SOC 1 report specifically covers the financial processing controls of an organization.
What is a SOC 1 Report?
A SOC 1 report focuses on how a company that outsources its financial reporting services, manages its controls. A SOC 1 report ensures that sensitive financial data is only accessible to the right parties. It is necessary to be SOC 1 compliant as it shows your clients that you have their security and privacy at heart.
What are Controls?
Controls provide the assurance that physical access to data and information with regard to financial reporting is restricted to only authorized and approved users. Control objectives showcase the risks that controls are intended to mitigate. They help you understand what parts of your processes a SOC 1 audit will focus on.
Do I get a SOC 1 or SOC 2?
The most popular question asked about SOC reports and compliance is whether to get a SOC 1 or SOC 2. The difference between a SOC 1 report and a SOC 2 report is its focus of examination.
A SOC 1 report focuses on companies that outsource their financial reporting. Hence, making sure their controls are up to standard. A SOC 2 report focuses on the outsourcing of other non-financial services to third-party providers such as cloud services. Click here to learn more about SOC 2
Why do I need a SOC 1 Report?
A SOC 1 report helps boost the credibility of an organization. It shows that your organization handles all client financial data in an ethical and compliant manner. A SOC 1 report is an absolute necessity for any organization that deals with the financial data of clients in any form. Organizations such as Software as a Service (SaaS) providers, loan services, data service providers, medical claim processors all need a SOC Audit. In the business space, trust is king.
How long does a SOC 1 report last?
How long a SOC 1 report takes depends on what type of report you get. A SOC 1 Type 1 report takes about one to three months, while a SOC 1 Type 2 report covers a period of six to 12 months.
Types of SOC 1 Reports
SOC 1 Type I deals with the examination of a company’s control at a point in time. A SOC 1 Type 1 lets an organization know which controls are a priority so they can focus on advancing them for future reports.
SOC 1 Type II covers a period of about 12 months. It examines a company’s test of controls’ design and operational effectiveness. A SOC 1 Type II is a much stronger audit. When conducted annually, it always keeps an organization compliant. Organizations usually get a SOC 1 Type I audit first as it lays the foundation for Type II.
How Can I Get a SOC 1 Report?
To get a SOC 1 report you must get an accredited CPA firm that specializes in auditing IT, and business process control to conduct a SOC 1 audit on your systems.
What if I need a Report right now?
At ITASC we pride ourselves in how fast we handle a SOC 1 compliance report. If you need a report quicker, a SOC 1 Type I report will be the best option to satisfy your requirements. Once you have that, we can get you started on a SOC 1 Type II report that will be more thorough and long-lasting.
SOC 1 reports save you from the world of cyber threats that increase every day. Your customers will thank you, and your partners will trust you for always keeping their financial data safe. Boost the overall legitimacy of your organization so you can continue to grow and expand with confidence in your financial processes.
How ITASC Can Help
ITASC is a leading IT audit firm based in San Francisco that specializes in performing various audits for organizations in different industries. We take all the complexities off your shoulder and get you compliant faster than you can ever imagine.