AICPA SOC 1, SOC 2, and SOC 3 reports & assessments are becoming increasingly more common in today’s business arena as service organizations now effectively have three distinct reporting options to choose from. With a global economy that’s becoming more efficient, scalable – and extremely reliant on technology – SOC reports & assessments are now being performed on thousands of businesses throughout the world as customers are demanding assurances of a service organization’s internal controls.
SOC 2 Type 1 & Type 2 Audit Reports | Los Angeles, California
One of the biggest and most time-consuming mandates regarding SOC 2 compliance is providing auditors with various information security policies and procedures for showcasing an organization’s system of internal controls. The problem, however, is that most companies simply lack this type of documentation, along with also lacking the internal resources for developing all necessary policies and procedures, but NDB can assist, and it’s why businesses turn to us for regulatory compliance, and so should you. As trusted leaders in the world of regulatory compliance, NDB offers the following SOC 2 services to California businesses:
Out with the old and in with the new! With the replacement of the outdated SAS 70 auditing standard (which was in place for nearly two decades), AICPA SOC reports are becoming increasingly more common. Service organizations now have three distinct reporting options---and with this noteworthy change, it is important to take note of the following items regarding these options:
1. It’s a SOC world after all. The all new SOC (Service Organization Control) platform represents a monumental shift initiated by the American Institute of Certified Public Accountants (AICPA). In an effort to modernize and take a more global approach to service organization reporting, the aging SAS 70 auditing platform has been replaced in favor of SSAE 16, under the umbrella of the SOC framework. Within this framework are three reporting options---SOC 1, SOC 2 and SOC 3. The ISAE3402 reporting option serves as an international equivalent to SSAE 16, which is the de facto standard for compliance reporting.
SOC 2 Type 1 & SOC 2 Type 2 audits for Orange County, California service organizations are available from NDB Accountants & Consultants, one of California’s most well-respected and highly regarded audit and advisory firms. For more than a decade, NDB has been helping California businesses charter the rough waters of regulatory compliance, so turn to us for expert advice, along with fixed fee pricing for all SOC 2 audit services.
SOC 2 Type 1 & Type 2 Audit Reports | Orange County, California
It’s important to understand 3 critical components for SOC 2 audit success for Orange County, California businesses: (1). Scope is critical. (2). Determining which of the five (5) Trust Services Principles (TSP) to include within a SOC 2 audit. (3) Information Security Policies and Procedures are critical for SOC 2 audit success.
SOC 2 Type 1 & Type 2 Audit Reports | Orange County, California | 3 Key Points
As for scope, Orange County service organizations will need to assess and ultimately determine what business functions are to be included with their SOC 2 reporting. More specifically, is it the entire company processes, or is it a certain segment within one’s business? This is critical for obvious reasons, such as SOC 2 pricing, along with internal operational commitments for undertaking and completing the audit itself. The larger the scope, the larger the fee and the more you’ll be spending on the audit, thus it’s important to strike a balance between cost and what your client’s are looking for in terms of SOC 2 reporting.
SOC 2 Type 1 & Type 2 Audit Reports | Which Trust Services Principles (TSP)?
- Processing Integrity
Furthermore, regardless of which of the five (5) TSP’s are included within the scope of a SOC 2 report, one thing’s for certain – information security policies and procedures are essential for SOC 2 compliance. That’s right, documentation is very large part of any SOC 2 audit, and it’s why NDB provides a complimentary SOC 2 Policy Packet to each of our clients. The SOC 2 Policy Packet provides literally hundreds of pages of professionally researched and written, easy-to-use documentation that helps Orange County service organizations save thousands of dollars on compliance costs. From access control policies to change management, risk assessment templates, security awareness training manuals – and more – the NDB SOC 2 Policy Packet is a must have for Orange County businesses.
NDB also has built a highly efficient, lockstep process for SOC 2 audits for North Carolina businesses that consists of the following:
1. SOC 2 Scoping & Readiness Assessment. Want to avoid the dreaded “scope creep” and associated cost overruns, then conduct a SOC 2 readiness assessment from a reputable CPA firm, one that provides true insight and value into your internal control environment. NDB’s SOC 2 readiness assessment examines a service organization’s internal control environment, related policies and procedures, and much more. When done correctly, a SOC 2 readiness assessment is extremely valuable. Additionally, another benefit of NDB’s SOC 2 readiness assessment for North Carolina businesses is identifying what businesses processes are included for the audit, what physical locations, and the supporing personnel – all of which are significant items that require examination and confirmation. After all, “cost-containment” is essential for today’s compliance audits, and a readiness assessment helps achieve this.
2. SOC 2 Remediation & Implementation. Once the gaps and deficiencies are found – and very company has them – it’s time to roll up the sleeves and begin remediating all findings, which often means developing comprehensive documents and strengthening internal control activities. NDB provides complimentary SOC 2 Policy Packet documents to each of our valued clients, helping them save thousands of dollars and hundreds of hours on critical remediation issues. Additionally, NDB provides onsite assistance for assisting with strengthening and formalizing internal controls, ranging from general I.T. issues to daily operational best practices.
3. SOC 2 Testing and Compliance. While SOC 2 Type 1 assessments are for a specific date in time, such as August 27, 20xx, SOC 2 Type 2 reporting encompasses what’s known as an actual test period – generally six (6) months. Many service organizations begin by conducting a SOC 2 Type 1, then move towards annual SOC 2 Type 2 compliance, so speaking with a well-qualified CPA firm that’s been providing years of service to Charlotte, Raleigh | Durham, North Carolina businesses is smart move.
4. Report Issuance. Once the heavy lifting and hard work has been done by both NDB and your internal personnel, the next step is putting together all the pieces of the puzzle for drafting the SOC 2 report. This means putting the documentation through an incredibly extensive quality assurance program, and once that’s complete, it’s time to move forward with an official closing meeting and discuss all administrative items for effectively “closing out”” the audit for the current year.
SOC 2 Type 1 & Type 2 Audit Reports | Charlotte, Raleigh, North Carolina
NDB offers comprehensive SOC 2 Type 1 and SOC 2 Type 2 audit reports for businesses in and around the Washington, DC, Baltimore, and Northern Virginia metropolitan area. From SOC 2 readiness assessments to policy writing, along with conducting the actual assessment itself, NDB is your total solution provider for today’s demanding regulatory compliance services, such as SOC 1, SOC 2, and much more.
The Washington, D.C., Baltimore, and Northern Virginia metropolitan region is an absolute mecca for information technology, entrepreneurship, start-ups, and more, and it’s actually known as the second Silicon Valley. With all the technology placed into one regional area, the demand for regulatory compliance mandates has absolutely skyrocketed, and understandably so, as many of these businesses provides services to the federal government and other big corporations. Unfortunately, regulatory compliance is not generally high on the “to do” list with many businesses – but that’s all changed – thanks largely to the growth of cybersecurity concerns and threats for the North American economy.
The result – enter the politicians, pundits, and regulators who now are pouring out laws and regulations at a pace never seen before. It means that SOC 2 compliance is now a mandate for many Washington, DC, Baltimore, and Northern Virginia metropolitan area businesses, so now’s the time to learn in-depth details about the SOC 2 framework, courtesy of NDB, North America’s leading provider of SOC 2 compliance audits.
SOC 2 Type 1 & Type 2 Audit Reports | Washington DC, Baltimore, Northern Virginia
From nonprofits in the District of Columbia to technology startups in Reston, VA, wherever you are in the Washington, D.C., Baltimore, and Northern Virginia metropolitan region, NDB is ready and willing to assist with your growing compliance needs. We’re often asked what it takes to become SOC 2 compliant – a checklist, that is – for ensuring an efficient process from day one.
Let’s take a look at the following elements for helping you gain a greater understanding of SOC 2 Type 2 and SOC 2 Type reports:
AICPA Framework: The American Institute of Certified Public Accountants (AICPA) – in an effort to align their reporting framework with internationally driven standards, while also putting to rest the often misused SAS 70 auditing standard – launched the AICPA Service Organization Control (SOC) reporting platform in 2011. It was a much-needed change, one that allowed the AICPA to keep pace with the ever-changing and complex global business environment, where the use of third-party services continues to grow rapidly. The SOC framework has three (3) reporting options – SSAE 16 SOC 1 assessments, SOC 2 assessments, along with SOC 3 assessments. As a service organization, you’ll need to be cognizant of the SOC background for ensuring the “correct” audit is chosen - which often is the source of confusion that’s fueling the SOC 1 vs SOC 2 debate!
Readiness Assessment: Want to gain a greater understanding of your control environment and learn about important issues and gaps that require immediate attention prior to the actual SOC 2 audit? Then it’s critical to undertake a SOC 2 readiness assessment with NDB – a highly beneficial and proactive exercise for ensuring all necessary gaps, deficiencies and internal control failures are corrected before the audit begins. It’s not just another expense or added fee to the SOC 2 process – rather – a readiness assessment is a long-term investment yielding substantial savings in terms of operational man-hours for years to come.
Business Processes: It’s also important to pick and choose what specific business functions and services are going to be included within the scope of a SOC 2 assessment – the entire organizational service offerings, or just a micro-component of what your business offers? The greater the scope, the larger the audit cost, the longer it will take to complete, and the more likely that control deficiencies will be found in the report.
Remediation: Fixing problems under the hood – as the old saying goes – is without question one of the most important things to be accomplished during the SOC 2 auditing process. Look, every business will have some type of remediation to perform – some more than others – from updating policies to making system enhancements. Not only is remediation necessary for hopefully achieving a clean bill of health during the audit process, it’s also a best practice for helping secure critical organizational assets. NDB provides comprehensive remediation services, from policy writing to system configuration procedures – and more – so let’s talk today.
Washington DC, Baltimore, Northern Virginia SOC 2 Audit Experts
Talk to the trusted SOC 2 experts today at NDB when it comes to superior services and fixed fee pricing for Washington DC, Baltimore, and Northern Virginia businesses. Call and speak with CPA Christopher G. Nickell today at 1-800-277-5415, ext. 706 to learn more.
SOC 2 Type 1 & SOC 2 Type 2 audits for Washington, DC, Maryland, and Northern Virginia business are available from the global compliance experts at NDB Accountants & Consultants, LLP (NDB). With years of working in the DC metro area, NDB has built a household name and also a reputation as a firm that provides exceptional service, along with reasonably priced, fixed-fee SOC 2 assessments. Compliance mandates – be it from the halls of the mighty U.S. Congress to industry specific mandates – are just going to continue to grow aggressively as the digital world moves ever forward with new products and technologies. It means that businesses in the tech rich industry within Washington, DC, Maryland, and Northern Virginia can be expected to see continued requests for annual SOC 2 assessments.
NDB offers the following SOC 2 services to the greater Washington, DC, Maryland, and Northern Virginia area:
1. SOC 2 Readiness Assessments: Understanding one’s entire landscape for purposes of SOC 2 reporting is critical, and it’s why Washington, DC, Maryland, and Northern Virginia service organizations should conduct a SOC 2 readiness assessment. Look upon it as a proactive and insightful exercise for learning about your control environment and what weaknesses exist. As for weaknesses and gaps, think policies and procedures – that’s right – documentation is highly critical for SOC 2 compliance and NDB Provides a complimentary SOC 2 Policy Packet to our valued Washington, DC, Maryland, and Northern Virginia client base. After all, who really wants to spend hundreds of hours writing compliance documentation? It’s just one of many reasons why Washington, DC, Maryland, and Northern Virginia businesses turn to NDB for SOC 2 compliance.
2. SOC 2 Remediation: Becoming compliant with SOC 2 often means climbing some big hurdles in terms of remediation, such as developing comprehensive security policy documentation, along with making system changes to critical I.T. resources. NDB has years of experience working with service organizations in both authoring technical documents, along with enhancing system settings, and we have in-depth documentation available for both mandates. From our highly coveted SOC 2 Policy Packet – free to all NDB clients – along with detailed provisioning forms and checklists, we have Washington, DC, Maryland, and Northern Virginia businesses covered when it comes to SOC 2 remediation.
3. SOC 2 Type 1 and Type 2 Assessments: SOC 2 Type 1 assessments are a great “stepping stone” towards SOC 2 Type 2 compliance. After all, most businesses are interested in a service organization’s internal control environment over a defined period – such as six (6) months, or longer – and this is exactly what SOC 2 Type 2 audits are intended for.
4. Other Regulatory Compliance Services: NDB offers much more than just SOC 2 compliance for Washington, DC, Maryland, and Northern Virginia businesses, we also provide SSAE 16 SOC 1 compliance reporting, along with PCI DSS certification, HIPAA compliance, and much more. Additionally, we offer numerous national security and federal compliance services also. It’s a complex and highly charged, bureaucratic world we live in, so turn to the experts in the nation’s capital for SOC 2 compliance, or any other type of regulatory mandate that’s been mandated by your company.
SOC 2 Type 1 & SOC 2 Type 2 audits for Dallas, Texas businesses are available from North America’s leading regulatory compliance experts, and that’s NDB Accountants & Consultants, LLP (NDB). The Dallas, TX economy is booming like no other city, creating thousands of jobs and immense opportunities for all, yet big compliance mandates also come along with such success. Technology is a big part of Dallas’ growth, and SOC 2 audits are in great demand for the likes of cloud computing providers, data centers, and more.
NDB offers the following SOC 2 services to the greater Dallas Fort-Worth (DFW) Metroplex area:
SOC 2 Readiness Assessments: It’s important for Dallas businesses to clearly assess and understand critical SOC 2 issues relating to cardholder data scope, policies and procedures documentation, and more. Companies are generally quite good at what they do – after all – you wouldn’t be in business, right? Unfortunately, documentation is often lacking for many businesses, and it’s why a readiness assessment is critical for identifying such gaps and policy weaknesses.
SOC 2 Remediation: Every company will have at least some element of remediation necessary for ensuring a successful SOC 2 assessment. While some service organizations have a highly mature control environment, others will have to develop comprehensive policies, procedures, and processes as part of one’s remediation efforts. Interestingly, most businesses that require remediation are in need of documentation – specifically – information security policies and procedures, and it’s why NDB provides each client with our industry leading SOC 2 Policy Packet.
SOC 2 Type 1 and Type 2 Assessments: Ultimately, what many of your client want from you is an annual SOC 2 Type 1 and SOC 2 Type 2 report, and NDB provides such services for fixed fees, along with offering our well-known SOC 2 Policy Packets. Remember something very important – documentation is a critical component of regulatory compliance, so turning to NDB and utilizing our SOC 2 Policy Packets – which are complimentary to every one of our clients – is a smart move.
Fixed-Fees for Multi-Year Contracts: Deciding on an auditing firm, then engaging with them for multiple years, is a big financial commitment, no question about it. With that said, NDB offers highly competitive, fixed-fee pricing for multi-year contracts for SOC 1 assessments. Look, no one really wants to change auditors every year – that can be an operational nightmare – so finding and choosing a firm that provides exceptional service and pricing is critical, and that’s exactly what NDB offers. Contact Christopher Nickell, CPA, at 1-800-277-5415, ext. 706 today to learn more.
As stated earlier, policies and procedures are a big part of SOC 2 compliance, often requiring companies to spend thousands of dollars on policy writing experts, which is another reason service organizations in the Dallas, TX metroplex turn to NDB. With years of experience writing information security policies and procedures, NDB can help businesses save hundreds of hours and large sums of money on SOC 2 compliance.
SOC 2 Type 1 & Type 2 Audit Reports | Dallas, Texas
Need a quick SSAE 16 summary or primer on the new standard put forth by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA)? If so, take note of the following SSAE 16 summary areas:
1. SSAE 16 has effectively replaced SAS 70. SAS 70, which was put forth in April of 1992 is no longer an auditing standard in use. This is critically important as it represents one of the most significant changes in reporting on controls for service organizations. For the first time in almost twenty years, we have a new "attest" standard for reporting.
2. SSAE 16 is part of a much bigger, broader change. That's right, not only did SSAE 16 replace SAS 70, but an entirely new reporting platform for service organizations has been introduced. Known as Service Organization Control (SOC) reports, organizations can now opt for SOC 1, SOC 2, and/or SOC 3 reporting.
3. Learn about the new SOC reporting options. The new AICPA alphabet of reporting on controls at service organizations can seem a little confusing, but for an ounce of clarity, try and remember the following for your SSAE 16 summary primer:
- SOC 1 reports are to use the SSAE 16 standard and should generally be issued when there is a true and credible link or "nexus" to the internal control over financial reporting (ICFR) concept.
- SOC 2 and SOC 3 reports are a great choice for the growing number of cloud computing and Software as a Service (SaaS) based entities.
4. Learn about the written statement of assertion and the description of the service organization's "system". In short, the written statement of assertion requires management to effectively "assert" to a number of clauses regarding the actual assessment performed by a practitioner (i.e., CPA). Additionally, the description of the "system" requires management of the service organization to comprehensively document their "system". That's a brief SSAE 16 summary for you, thus if you want to learn more about Statement on Standards for Attestation Engagements No. 16, visit the official SSAE 16 Resource Guide, developed by NDB Accountants & Consultants, a nationally recognized PCAOB CPA firm. Lastly, if you are in need of SSAE 16 services at a competitive, fixed-fee, contact NDB directly at 1-800-277-5415, ext. 706.
SSAE 16 Certification is a phrase I keep hearing over and over again. It’s not really a huge issue, but for an ounce of technical clarity, there is no such thing as SSAE 16 certification, just as there was no such thing as SAS 70 certification. Both of these phrases were born out of a true misunderstanding of the historical SAS 70 auditing standard and the current SSAE 16 attest standard. Technically speaking, SSAE 16 is an attestation standard put forth by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA), for which a practitioner (i.e., service auditor) uses the standard to perform an attest engagement for a service organization, resulting in the issuance of a service auditor’s report on controls.
There is no designation, certification, award, confirmation, or any other type of validation for an actual SSAE 16 assessment. It’s best to summarize that a service organization simply undertakes an assessment in accordance with the SSAE 16 standard, resulting in the issuance of report with a stated opinion, generally unqualified, by a CPA firm as part of the report. So, if you hear the term SSAE 16 certification, you can politely remind your colleagues or other interested parties that this technically incorrect. With that said, if your organization is seeking a well-qualified, cost-effective provider for SSAE 16 assessment services, then contact NDB Accountants & Consultants, a nationally recognized PCAOB CPA firm, at 1-800-277-5415, ext. 706. Additionally, if you want to learn more about SSAE 16, visit the official SSAE 16 Resource Guide, developed by NDB, where you can learn more about the following essential information:
- Background on SSAE 16
- Description of the “System”
- Written Statement of Assertion
- AICPA Service Organization Control (SOC) framework
- SSAE 16 Readiness Assessment
Service Organization Control (SOC) Reports, more commonly known as SOC 1, SOC 2, and SOC 3, as you may or may not be well aware of by now, represent the new framework put forth by the American Institute of Certified Public Accountants (AICPA) for reporting on controls at service organizations.
SOC 1, is essentially tied to service organizations for which reporting is ICFR based, that is, internal controls related to financial reporting. SOC 2 and SOC 3, however, represent a sincere and genuine attempt by the AICPA to meet the growing demands and complexities of reporting on controls for service organizations OUTSIDE that of ICFR. In essence, it's a move to correct the misguided efforts by many who used the SAS 70 standard in an incorrect manner. Will it work? Well, the early signs are not that encouraging as I've seen recent press releases for data centers and managed services entities becoming SSAE 16 "certified" or "compliant".
And by the way, the terms "certified" and "compliant" are grossly incorrect, for which you can learn more about how this has really irked the AICPA. Did they simply forget about SOC 2 and SOC 3? Are their clients simply sold on the merits of out with one standard (SAS 70), in with the new (SSAE 16), without being educated on the SOC framework? Have we as CPA's along with the AICPA not done enough to educate service organizations?
Well, I think it's a little of everything. I'm still hopeful that this "problem" will correct itself. I can already see the technical arguments, or rather, excuses, for issuing a SSAE 16 Type 1 or Type 2 report for a data center, managed services entity, or some other cloud type infrastructure....and here they are: "Well, that's what our clients wanted, so we used the SSAE 16 standard". Or how about this one, for which I"m hearing alot of: "Hey, if the controls are "likely relevant" to ICFR, then we can issue an SSAE 16 Type 1 or Type 2". Or, the one that takes the cake is this one: Nobody is taking SOC 2 and AT Section 101 seriously yet, so for now, I'll just fall in line and do what most other firms are doing and going right from SAS 70 to SSAE 16".
SOC 3 Reports also address Reporting on Controls relevant to Security, Availability, Processing integrity, Confidentiality, and Privacy in accordance with general predefined criteria within theTrust Service Principles. Please note that these reports are to be prepared using the AICPA and the Canadian Institute of Chartered Accountants (CICA) Trust Services Principles, Criteria, and Illustrations for Security, Availability, Processing Integrity, Confidentiality, and Privacy.
The framework for the Trust Services Principles has been around for quite some time, yet curiously, never really caught on as many would of imagined. Lastly it is considered a general use report and comes with a public seal. And much like SOC 2 reports, SOC 3 reports also use AT Section 101 as the professional standard for service auditor guidance. It will be interesting in the coming years how notable SOC 3 reports become in comparison to SOC 1 and SOC 2 reports.
To learn more about SOC 3 reporting standards and all other regulatory compliance services provided, please contact Chris Nickell, CPA, at 1-800-277-5415, ext. 706.
SOC 2 reports, which will come to be known as Reporting on Controls Relevant to Security, Availability, Processing integrity, Confidentiality, and Privacy, are to be conducted in accordance with AT Section 101. Thus, SOC 2 will effectively insert itself as the primary reporting option to be used for service organizations reporting on controls outside the scope of financial reporting. In simpler terms, Software as a Service (SaaS) companies, software development entities, cloud computing organizations, data centers, managed services, and many more, will be using the SOC 2 framework for reporting on controls. And much like SOC 1 reporting, a service organization can either be issued two (2) type of SOC 2 reports, a Type 1 and a Type 2.
If you stop and think about it, this is quite significant for a number of reasons. First and foremost, the SOC 2 framework is specifically geared towards the exponential growth of technology and security related service organizations, of which many provide outsourcing services to user entities. Second, it hopefully will correct a huge misunderstanding within the business community at large; the myth that SAS 70 was an all-in-one reporting standard for any type of service organization. As you now know, this is simply untrue and we now have an acceptable and viable reporting option for controls outside the scope of financial reporting.
Lastly, SOC 2 reports are designed to address generally the following key system attributes and traits:
- Availability: That the system is available for operation and use as committed or agreed.
- Security: That the system is protected against unauthorized access, both physically and logically.
- Processing Integrity: That System processing is complete, accurate, timely, and authorized.
- Confidentiality: That the information held by an organization is securely protected.
- Privacy: That personal information is protected.
As a service organization, you will need to evaluate your current compliance requirements and commitments to your customers and start to ask yourself what reporting option do "we" fall under, SOC 1, SOC, or even SOC 3? If you have been receiving SAS 70 audit reports from your CPA firm in the past, what do your customers expect in the future? More importantly, what is the correct SOC reporting framework that "we" should adhere to? NDB Accountants and Consultants can help answer these pressing questions regarding the new compliance requirements with the SOC framework.