In order to provide assurance that a service organization has controls in place that meet the criteria of the SOC 2 standard, an independent accounting and auditing firm performs a SOC 2 examination. The results of this examination are reported in a SOC 2 report.
A SOC 2 report is used by service organizations to demonstrate to their customers and other interested parties that they have controls in place to protect the confidentiality, integrity, and availability of their systems and data. The report includes a description of the service organization’s system, the controls in place, and the results of the auditing firm’s testing of those controls.
Organizations that use SOC 2 reports include cloud service providers, managed service providers, and software-as-a-service (SaaS) providers. Reports are also used by organizations that store, process, or transmit sensitive data on behalf of their customers, such as payment processors and healthcare clearinghouses.
A SOC 2 report is not a substitute for a company’s own internal controls assessment or audit. Nor is it a guarantee that the service organization will never experience a data breach or system outage. However, it is one way that companies can provide assurance to their customers that they are taking steps to protect their sensitive data.
SOC 2 reports are not publicly available. They are meant to be shared only with those parties who have a need to know, such as current and potential customers, business partners, and regulators.
If you are considering doing business with a service organization, you can ask to see their SOC 2 report. Or, if you are already a customer of a service organization, you can request a copy of their SOC 2 report. Keep in mind, however, that the service organization may not be able to provide you with a copy of their report if doing so would disclose confidential information.
When reviewing a SOC 2 report, pay attention to the scope of the examination. A SOC 2 report should include a description of the systems covered by the report and the specific controls that were tested. It is important to make sure that the scope of the report covers all of the systems and data that are important to you.
In addition, pay attention to the auditor’s opinion. A SOC 2 report includes an opinion from the auditing firm on whether the controls tested were operating effectively. The auditor’s opinion should be unqualified, which means that they found no exceptions to the controls. If the auditor’s opinion is qualified, it means that they found one or more exceptions to the controls.
Finally, make sure to read the entire SOC 2 report example. Don’t just focus on the auditor’s opinion. The report includes other important information, such as a description of the service organization’s system and the results of the auditing firm’s testing. This information can help you understand how the service organization’s controls work and whether they are adequate for your needs.