Overview of SOC Reports

SOC reports are crucial for organizations that outsource critical services, such as cloud computing, payroll, or claims processing. These reports provide insights into the control systems of service providers, especially in terms of security, processing integrity, and data confidentiality. Before entering service agreements, organizations review SOC reports to ensure that providers have effective controls that meet organizational standards​​.

Types of SOC Reports

SOC 1 Report

Focuses on controls relevant to a user entity’s internal control over financial reporting. SOC 1 reports are used by auditors and are limited to assessing the financial impact of the service provider’s controls.

• Type 1: Evaluates the design and suitability of controls at a specific point in time.

• Type 2: Assesses the operating effectiveness of controls over a specified period​.

SOC 2 Report

Evaluates controls related to security, availability, processing integrity, confidentiality, and privacy based on AICPA’s Trust Services Criteria. This report is often requested by customers and regulators for detailed insights into the security and operational integrity of a provider.

• Type 1: Similar to SOC 1 Type 1, it reviews the design and implementation of controls as of a specific date.

• Type 2: Similar to SOC 1 Type 2, it includes a review of the effectiveness of controls over a period​​.

SOC 3 Report

A public summary of SOC 2, intended for general audiences who require confidence in the service organization’s controls without needing in-depth detail. SOC 3 provides an overview of security and availability in a format accessible to non-specialists​.