With the increasing utilization of third-party service providers, the need for trust and transparency between service organizations and their customers is essential.
For service organizations that handle customers’ sensitive data, what assurance does the service provider have that proves to the customer that their sensitive data is handled in a safe and secure manner? How do current or prospective customers know that a current or prospective service organization has adequate controls in place from both operations and IT standpoint?
Obtaining a SOC report has become increasingly relevant for organizations of all sizes. Customers and prospective customers need assurance that effective internal controls and related safeguards have been implemented at the service organization they use.
Ensuring that the organization has effective internal controls and practices in place is essential. In fact, many customers expect to see a SOC report as part of their due diligence before deciding to do business with an organization.
The benefits a SOC report provides to service organizations and their customers (user entities) are highlighted below.
Benefits of a SOC Report to a Service Organization:
Increase trust and provide transparency to internal and external stakeholders.
Provide management with assurance regarding the effectiveness of an organization’s internal controls, while also providing insights for opportunities to improve internal controls and risk mitigation activities.
Reduce, manage and mitigate business and organizational risk.
Differentiates the organization from competitors regarding the maturity of the internal control environment and the discipline to maintain that environment.
Reduce compliance costs and time spent on audits and filling-out vendor questionnaires.
Discover internal weaknesses and improve upon them to ensure business process efficiency.
Provide assurance regarding effective internal control as it relates to HIPAA, PCI, HITRUST and/or other laws, regulations or frameworks.
Benefits of a SOC Report to a Customer (User Entity):
Customers are assured that procedures and controls are in place and that the organization can provide consistent quality and reliable services. Management is assured that business and operational risks are managed and mitigated.
Indicates that the service organization is willing to invest time and resources into maintaining an effective control environment to ensure that the customer’s data is handled in a safe and secure manner.
Shows that the organization is investing in improving its controls to better serve its customers.
User entities (and prospective users) gain transparency regarding a system providing services, and assurance that relevant inherent risks are effectively mitigated (i.e., vendor risk management).
The assurances provided from a SOC examination increase profits, reduce risk, strengthen brands, and create a competitive advantage. Schneider Downs employs a unique approach to delivering SOC reports, integrating the expertise of information technology, internal audit and external audit professionals. By combining cross-disciplinary knowledge and project management expertise, we are able to effectively deliver on our clients’ expectations. If you are interested in learning how we can assist your organization, please contact us to get started or view more SOC FAQs at www.schneiderdowns.com/soc-report-faq.
About Schneider Downs SOC Services
Schneider Downs employs a unique approach to SOC reports, integrating the expertise of information technology, internal audit and external audit professionals. By combining cross-disciplinary knowledge and project management expertise, we are able to effectively deliver on our clients' expectations. If you are interested in learning how we can assist your organization, please contact us to get started or view more SOC FAQ's at www.schneiderdowns.com/soc-report-faq.
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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.