SOC Reports, Controls, and Assurance Flashcards

SOC 1 Report

• Purpose: Reports on controls at a service organization relevant to user entities' Internal Control over Financial Reporting (ICFR).
• Intended Audience: Service organization management, user entities, and user auditors only.
• Types:
  • Type 1: Reports on the design of controls as of a specific date.
  • Type 2: Reports on the design and operating effectiveness of controls over a period of time.

SOC 2 Report

• Purpose: Used to evaluate controls related to:
  • Security
  • Availability
  • Processing Integrity
  • Confidentiality
  • Privacy
• Distribution: Restricted

SOC 3 Report

• Purpose: A general use report on trust services criteria.
• Distribution: Freely distributed.

SOC Report Sections

• The reports typically include the following five sections:
  • Management’s Assertion
  • Auditor’s Report
  • System Description
  • Auditor’s Tests of Controls
  • Other Information from Service Organization

AT-C 320

• Focus: Reporting on an examination of controls at a service organization relevant to ICFR.

Limited Assurance

• Definition: A level of assurance that is less than reasonable assurance.

Professional Skepticism

• Definition: An attitude that includes a questioning mind and a critical assessment of audit evidence.

Internal Auditors

• Usage: Their work may be used by the practitioner to gain understanding and gather evidence, if deemed reliable.

Materiality

• Definition: Determines the significance of misstatements or control deficiencies within SOC reports.

Control Objectives and Activities

• Control Objectives: Define what controls aim to achieve.
• Control Activities: The actual procedures in place to meet the control objectives.

Reasonable Assurance

• Definition: A high level of assurance that the subject matter is free from material misstatement.

Limited Assurance (Revisited)

• Definition: A moderate level of assurance where the practitioner concludes that no material modifications are needed based on performed procedures.

Positive Expression

• Definition: An explicit statement that the subject matter conforms with criteria; typically used in reasonable assurance engagements.

Negative Expression

• Definition: A statement that nothing came to the practitioner's attention to indicate material misstatement; used in limited assurance engagements.

Reasonable Assurance in SOC Reports

• SOC 1 and SOC 2 reports usually provide reasonable assurance, especially in Type 2 engagements.

SOC 3 Report Details

• SOC 3 is for general use and may provide less detail than other SOC reports.
• It is publicly available and does not contain detailed system or control test descriptions.