Systems and Organization Controls (SOC) audits ensure businesses comply with cybersecurity and compliance standards. An independent auditor examines the company’s internal controls and processes. to determine how well it manages data while ensuring its integrity and confidentiality. Why should a company take this step?
Why Conduct an SOC Audit?
Business owners might question why they should pay SOC auditors. Stakeholders often want to see this information to ensure data is appropriately handled. The audit process shows the company is committed to maintaining operational integrity standards and adequately handling sensitive data.
A successful audit builds trust while ensuring compliance. It helps a company determine where it is vulnerable and what changes must be made to reduce risks. When the audit is complete, business owners can share the results with stakeholders to gain a competitive edge in the industry.
Is an SOC Audit Required?
Many business owners ask if SOC audits are mandatory. While any government entity does not require them, stakeholders might require a company to undergo the audit. They want to know that service organizations handle sensitive or confidential data correctly. Service organizations and entities that must comply with specific regulations often find stakeholders require these audits. The same holds for organizations that regularly handle sensitive and confidential data.
Technology companies and financial services often find stakeholders require SOC audits. Healthcare organizations and vendor management firms are other industries that usually need SOC audits. However, stakeholders in any industry might require a company to undergo an SOC audit before doing business with that company.
Can the Company Perform the SOC Audit?
Companies cannot perform their own SOC audits. An SOC auditor is usually an American Institute of Certified Public Accountants-accredited certified public accountant. This individual thoroughly understands the audit processes and how they relate to information security. They are well-versed in SOC 2 and SOC 3 frameworks and can determine the effectiveness of a company’s Trust Service Criteria. These men and women also have experience with Type I and Type II reports.
An outside auditor is unbiased, which is necessary for this type of evaluation. Clients and stakeholders know the results are accurate because the auditor adheres to all AICPA rules. They can feel confident the company maintains high security standards and remains in compliance.
SOC Audit Steps
The company prepares for the audit by determining its scope and objectives. It then chooses an auditor to examine it. The auditor assesses and tests the company’s controls and reports their findings to stakeholders.
Understanding SOC Controls
Auditors focus on specific areas during their assessments. They examine internal controls over financial reporting and information security, risk management and controls, and operational effectiveness. The auditor also ensures the company is complying with regulatory standards. These controls are separated into Trust Service Criteria-security, availability, confidentiality, processing, and privacy.
Conclusion
Business owners may undergo an SOC audit even if stakeholders do not require it. These reports help them verify internal controls to keep customer data safe. Stakeholders appreciate the audit because it shows the business is committed to transparency. Customers will trust the company more because an outside party has verified the data controls.
They know cybersecurity and supply chain risks have been identified so they can be better managed. Business owners feel confident they aren’t facing heavy penalties and fines because they comply with regulatory standards, and potential partners appreciate this audit because they know they will be working with a business committed to robust governance and data security. Everybody wins when this audit has been completed.
