What Is a SOC 3 Report and Why Is It Important?
Discover how a SOC 3 report translates complex internal audits into a public-facing document, building customer confidence in your system's integrity.
A System and Organization Controls (SOC) 3 report is an attestation document that provides a high-level summary of an organization’s internal controls. Issued by an independent Certified Public Accountant (CPA), it is designed as a general-use report, meaning it can be freely shared with the public. This report offers assurance that a service organization has effective controls for its systems and the data it manages.
The primary audience for a SOC 3 report includes potential customers, investors, and other stakeholders who need confidence in a company’s operational integrity but do not require extensive technical details. It signals that the organization has undergone an audit process based on standards set by the American Institute of Certified Public Accountants (AICPA). The report is a way for companies, especially in technology and cloud computing, to demonstrate a commitment to security and data protection in an easily digestible format.
Purpose and Use of a SOC 3 Report
A SOC 3 report’s main function is to serve as a marketing and trust-building tool. It is designed for public consumption, allowing organizations to post it on their websites or use it in marketing materials to showcase their commitment to robust security and operational controls. By providing a CPA’s independent validation, the report helps build confidence with customers who are concerned about how their data is handled and protected.
The report allows a company to demonstrate compliance with industry-recognized standards without revealing sensitive information about its internal operations. This is valuable for service organizations like SaaS providers, data centers, and cloud computing businesses that handle large volumes of customer data. A publicly available SOC 3 report can be a competitive differentiator, helping to attract new business and retain existing clients.
Upon successful completion of the examination, an organization is permitted to display a specific AICPA seal on its website. This seal visually represents that the company has achieved a favorable SOC 3 report, serving as a quick and recognizable badge of trust for visitors. The ability to use this seal provides at-a-glance assurance of the company’s dedication to maintaining a secure service environment.
Key Components of a SOC 3 Report
A SOC 3 report is intentionally concise and contains several distinct components designed for a general audience. The core of the document is the independent service auditor’s report, which includes the CPA firm’s official opinion. This opinion evaluates whether the service organization’s description of its system is fair and if the controls were effective in meeting specific objectives during the audit period.
Another part of the report is the assertion from the service organization’s management. In this section, management formally claims that the system was designed and operated to achieve its service commitments and system requirements based on the applicable criteria. This assertion is the statement that the auditor is hired to validate.
The report also includes a brief, high-level description of the system provided by the service organization. This overview explains the services offered and the boundaries of the system that was audited but omits the highly detailed information found in other types of SOC reports.
The assurance provided is based on the AICPA’s Trust Services Criteria. While the Security criterion is a common baseline, an organization can choose to include any combination of the five criteria:
- Security
- Availability
- Processing Integrity
- Confidentiality
- Privacy
The SOC 3 report is derived from the more detailed SOC 2 audit, but it summarizes the findings without including the specific tests performed by the auditor or their results.
The Process for Obtaining a SOC 3 Report
The journey to obtaining a SOC 3 report begins with a mandatory prerequisite: a company must first successfully complete a SOC 2 Type 2 audit. A SOC 3 report cannot be issued on its own; it is fundamentally a summarized version of the more detailed SOC 2 report.
This process starts by engaging a licensed and independent CPA firm that specializes in conducting SOC audits. The organization must then work with the auditor to define the scope of the audit, which involves selecting the specific Trust Services Criteria that are relevant to its service commitments.
Following the scoping phase, the auditor performs an assessment of the organization’s controls. This involves reviewing documentation, interviewing personnel, and testing the operational effectiveness of the controls over a specified period, typically six to twelve months for a Type 2 report. The organization must provide evidence that its controls are designed appropriately and have been operating effectively to meet the chosen criteria.
Once the SOC 2 examination is complete and the auditor issues an unqualified opinion—meaning the controls are effective—the organization can then request the issuance of a SOC 3 report. The CPA firm prepares this condensed, public-facing document based on the findings of the SOC 2 audit.