Are SOC 1 Reports Publicly Available?

Internal control reports are important in today’s business environment. They provide assurance regarding an organization’s internal controls, which are processes and procedures designed to ensure reliable financial reporting and operational efficiency. These reports foster trust and transparency between service providers and their clients.

Understanding SOC 1 Reports

A SOC 1 report, or Service Organization Control 1 report, provides information about a service organization’s internal controls that are relevant to a user entity’s financial reporting. User entities are organizations that rely on a service organization to perform certain functions that impact their financial statements. The primary purpose of these reports is to give user entities and their auditors a clear understanding of the controls in place at the service organization. This allows the user entity’s auditor to assess control risk and determine the nature, timing, and extent of their audit procedures related to the outsourced service.

There are two types of SOC 1 reports: Type 1 and Type 2. A Type 1 report describes the service organization’s system and evaluates the suitability of its control design at a specific point in time. A Type 2 report evaluates both the suitability of the design and the operating effectiveness of controls over a specified period, typically six to twelve months. A Type 2 report includes a detailed description of the tests performed by the auditor and their results, providing a comprehensive assessment of control performance over time.

Access and Confidentiality of SOC 1 Reports

SOC 1 reports are not public documents. They contain sensitive and proprietary information about a service organization’s internal processes, control objectives, and control activities. Public release of this detailed information could expose the organization to security risks or provide competitors with valuable insights into their operations.

These reports are intended for a limited audience. Recipients include the service organization’s management, who use the report for internal oversight and control improvements. User entities also receive these reports to understand internal controls affecting their financial reporting. Independent auditors of these user entities rely on SOC 1 reports to evaluate control effectiveness as part of their financial statement audits. The distribution of SOC 1 reports is strictly controlled.

Requesting and Receiving a SOC 1 Report

Authorized parties request SOC 1 reports directly from the service organization. This occurs as part of a user entity’s due diligence process or as a requirement for their financial statement audit. User entities, or their auditors, initiate the request to gain assurance regarding controls impacting their financial data.

Access to these confidential reports is granted under specific conditions. A requirement is the execution of a non-disclosure agreement (NDA) between the service organization and the requesting party. This agreement ensures the sensitive information remains confidential and is used only for its intended purpose, such as audit procedures or risk assessment. Service organizations have established procedures for verifying a requestor’s legitimacy, ensuring reports are shared only with authorized clients or their auditors.