Which SOC Reports Are Publicly Available?

System and Organization Controls (SOC) reports are independent auditor reports on a service organization’s internal controls. Governed by the American Institute of Certified Public Accountants (AICPA), these reports assure that controls protecting client assets and data are effective. Businesses increasingly rely on third-party vendors for crucial services, making these reports important for understanding and managing associated risks. The question of their public availability is common, as their content varies significantly in detail and intended audience.

Confidential Nature of Most SOC Reports

Most SOC reports, specifically SOC 1 and SOC 2, are confidential and not intended for public distribution. They contain sensitive operational information about a service organization’s control environment. The detailed nature of this information, including specific security measures, necessitates restricted access.

SOC 1 reports focus on a service organization’s internal controls relevant to a user entity’s financial reporting. They assess controls that impact the accuracy and reliability of a client’s financial data, such as those used by payroll processors. These reports are primarily shared with user entities and their auditors to evaluate the effect of the service organization’s controls on financial statements. They are often required for Sarbanes-Oxley (SOX) compliance and other regulatory frameworks.

SOC 2 reports address operational risks, focusing on controls concerning security, availability, processing integrity, confidentiality, or privacy. These reports are based on the AICPA’s Trust Services Criteria; security is a mandatory criterion, with others selected based on services. Similar to SOC 1 reports, SOC 2 reports are restricted to specific stakeholders, including management of the service organization, user entities, and their auditors. The detailed findings, including control descriptions and test results, are sensitive.

Publicly Available SOC Reports

SOC 3 reports are designed for public availability. They serve as a general assurance report for a broader audience, providing a high-level summary of an organization’s controls without the specific details found in SOC 2 reports. This less detailed nature makes them suitable for public distribution.

SOC 3 reports cover the same Trust Services Criteria as SOC 2 reports, encompassing security, availability, processing integrity, confidentiality, and privacy. However, they present a summarized opinion on the effectiveness of these controls, rather than detailing specific controls or test procedures. Many organizations, particularly large cloud service providers, publish their SOC 3 reports on their websites or in customer trust centers to demonstrate their commitment to data protection and security.

The primary purpose of a SOC 3 report is to serve as a marketing tool and to provide general transparency to potential clients, partners, and the public. It allows a service organization to publicly highlight its adherence to robust control standards without disclosing the sensitive, granular information found in a SOC 2 report. This makes SOC 3 reports a valuable asset for building trust and credibility with a wide audience.

Role and Utility of SOC Reports

SOC reports play a significant role for both service organizations and user entities. For service organizations, obtaining a SOC report demonstrates a commitment to strong internal controls and adherence to industry best practices. This builds confidence with current and prospective clients, satisfying increasing demands for transparency and security.

These reports help service organizations meet compliance requirements and provide a competitive advantage by showcasing robust cybersecurity capabilities and control environments. They offer a standardized way to communicate information about their risk management and control framework to multiple stakeholders, reducing the need for individual client audits or extensive questionnaires.

For user entities, SOC reports are an important tool for vendor risk management. They allow businesses to evaluate the effectiveness of controls at their service providers, safeguarding their own data and operations. Reviewing these reports helps user entities meet regulatory obligations, such as those related to financial statement audits or Sarbanes-Oxley compliance. By understanding their vendors’ control environment, user entities can make informed decisions and mitigate potential risks.