Organizations that specialize in offering outsourced technology services and that can impact the financials of their clients will most likely require a SOC1 Certification. Such organizations are likely to be asked by customers for thorough due diligence of their controls.
SOC1 Audit and Certification is a process that evaluates a service organization’s internal controls relevant to its customer’s financial statement. The audit report and the SOC1 Certification will work as evidence and assurance for potential customers when it comes to the security and transparency of the Service Organizations’ internal operations.
These are sensitive documents restricted to the use of the Management of the Service Organization, User entities, and User Auditors. It is essential and highly recommended that Service Organizations offering outsourced services get a SOC1 Certification to gain leverage in their industry. Explaining more on this, we have today shared details that service organizations like you should be knowing about SOC1 Certification.
Table of Contents
What is SOC1 Certification?
SOC 1 certificate/attestation also known as System and Organization Controls is a piece of documental evidence that the SOC1 audit performed on the Service Organizations internal controls related to the client’s financial reports meet the requirements of SOC1 established by the American Institute of Certified Public Accountants (AICPA). The SOC1 audit reports fall under the Statement on Standards for Attestation Engagements (SSAE) 18 and also formerly known as SSAE 16 or AT 801.
Who can perform a SOC1 Audit?
A SOC1 Audit is performed by a qualified CPA associated with a CPA firm that specializes in auditing IT and business process controls. A qualified CPA firm is an entity or a firm qualified by the American Institute of Certified Public Accountants (AICPA) and listed on their website. The CPA firm audits and verifies by providing an opinion on whether it agrees with the management’s assertion on controls claimed to be in place by the service organization and that the controls meet the objective of the report.
Is SOC1 Compliance Mandatory?
SOC 1 certification/attestation reports may be required by the clients or investors of a Service Organization to whom they provide services and has an impact on the client’s Internal Controls over Financial Reporting (ICFR). Depending on the industry and the risk associated with the service offered by the Service Organization, a SOC 1 certification can demonstrate that they have necessary controls in place to support the achievement of the control objective.
What is the validity of SOC1 certification?
SOC1 Certification is valid for a period of 1 year. The opinion stated in a SOC 1 report is valid for 1 year following the date the SOC 1 report was issued. The organization is required to undergo a SOC1 Audit annually to ensure SOC1 Compliance every year.
How much would a SOC1 Certification Cost?
SOC 1 Audit & Certification fee may vary depending on several factors. The below-given list of factors is often considered when fixing a cost for the SOC1 Certification. It includes but may not be limited to-
- Size of firm and number employees within the scope
- Location of offices and data centers in scope
- Scope of SOC1 Audit
- Number of business process control objectives
- Type of Audit Report i.e. Type I vs Type II report
- Complexity of IT, Business Process & Applications
- Technology Platforms & Cloud Infrastructure in use
- Associated risk to services and the data stored
Conclusion
SOC1 reports offer a detailed evaluation of the internal controls of the Service Organization. This works as a piece of evidence when validating the effectiveness of these internal controls policies, and procedures. With this, it helps establish trust and transparency between Service Organizations and relevant Stakeholders. Further, these reports are beneficial for Service Organizations as it helps them proactively determine the vulnerabilities and inconsistencies in systems and processes and address it accordingly.
This way, SOC1 Certification is beneficial for both Service Organizations and their clients. For these reasons it is strongly recommended that Service Organizations consider achieving SOC1 Certification for their business. Service Organizations can always consult an expert like us at VISTA InfoSec if they plan to achieve SOC1 certification. We have qualified CPAs by the AICPA to conduct SOC1 Audits and assist organizations in their efforts of achieving SOC1 Certification. Our experts can guide you through the process and make it an achievable process for your organization. For more detail on SOC1 Certification or our specialized SOC Audit & Certification services, you can drop us a mail at info[@]vistainfosec.com
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