A SOC 3 report, also known as the Statement on Standards for Attestation Engagements (SSAE) 21, focuses on a service organization’s controls that are likely relevant to examining a user entity’s (customer’s) service commitments and system requirements. SOC 3 reports cover a service organization’s security, availability, processing integrity, confidentiality, and privacy (referred to as the applicable trust services criteria categories) internal controls relevant to the service(s) provided. The security category is required for all SOC 3 reports, while the other categories are optional.
A SOC 3 report will be issued with a SOC 2 Type 2 examination (and, therefore, not for a Type 1 examination). It cannot be issued unless an unmodified SOC 2 Type 2 report opinion is issued.
These reports are not restricted in use as their purpose is for general use, unlike a SOC 2 report, which is restricted to the service organization’s management, user entities, and user auditors.
Benefits of Obtaining a SOC 3 Report
Several service organizations must undergo a SOC examination, including any service organization that may touch, store, process, or impact the data of their user entities. To start, a SOC report is an independent, third-party validation of a service organization’s commitment to evidencing its controls’ design and effective operation. A SOC 3 report can be used in pre-contractual relationships to win the trust of potential customers, know that your company is trustworthy, that you take the applicable trust services criteria categories seriously, and that you are operating according to industry requirements. Additionally, by having a SOC 3 report, you can provide potential customers with the assurance that an independent third party has not identified material or pervasive weaknesses or flaws during their examination procedures.
Service organizations may use a SOC 3 report as a competitive differentiator against unexamined companies. The AICPA offers a SOC logo that service organizations can use, providing an easy opportunity for clients and prospects to recognize that the service organization has met AICPA-designated standards.
Getting Started and What to Expect with SOC Attestation
Working with a CPA firm specializing in SOC examinations can make the process less painful and more beneficial for your company. Auditors can help determine what type of SOC report your company will most benefit from and will be there from the start by helping your company complete a SOC readiness assessment. A readiness assessment is a significant first step and can help a company prepare for the examination by identifying current controls, deficiencies, gaps, and needed remediation.