SOC Report: Why are our Sales & Marketing Teams Insisting we have one?
Prospects may ask for a SOC report as a way to assess the controls and processes in place at an organization before doing business with them. Many organizations, particularly in regulated industries or those that handle sensitive information, are required to demonstrate compliance with relevant regulations and industry standards. A SOC report can be an effective way to do this.
Prospects or customers may also ask for a SOC report as a way to evaluate the security of an organization’s systems and data. A SOC 2 report can be used to assess an organization’s controls around data security, availability, processing integrity, confidentiality, and privacy. This type of report can provide assurance to prospects or customers that their sensitive information will be protected if they do business with the organization.
Prospects and customers with complex, critical systems may request a SOC 3 report. Unlike SOC 2, SOC 3 reports are for general use and can be distributed freely or posted to an organization’s web site. This is because SOC 3 reports do not include the level of details a SOC 2 does, but can provide a prospect with sufficient detail to provide assurance and understanding about the controls at a service organization relevant to security, availability, processing integrity, and privacy.
Prospects and customers may also ask for a SOC report to determine the effectiveness of controls at an organization to mitigate risks relating to financial reporting. Many enterprises depend on internal controls at service organizations. A SOC 1 report is ideal to provide the evidence of an entity’s operating effectiveness of controls and minimize the audit process for financial statement auditors.
Prospects may also ask for a SOC report as a condition of doing business with an organization. In other words, they may require a SOC report as a prerequisite to signing a contract or agreeing to a partnership.
It’s worth noting that not all companies will have a SOC report, especially smaller companies with less complexity in their operation, but if you are planning to target large organizations with strict compliance requirements, having a SOC report on hand will give you an edge.
In addition, a SOC report can also be useful internally, as it can help an organization identify areas where controls or processes can be improved, which can help to reduce risk and improve overall operational efficiency.
If you have questions about SOC reports, please contact Andrew Mathieson at 774.512.9089, email@example.com; or your AAFCPAs Partner.