Due to the increase in user entities outsourcing various processes and segments of their business, the demand for assurance of confidentiality and privacy of those service organizations has become a standard part of conducting business. In 2011, SAS 70 was changed into SOC audit (Service Organization Controls reports), to prevent the continued misuse of the old standard for assessing internal controls. The two most common types of audits, SOC 1 and SOC 2, can be broken down into two types of reports (Type I and type II), based on the impact of those internal controls on financial reporting and the time period being audited.
Benefits of SOC Audits
Trust: The most important step in establishing a healthy business relationship is trust. If you are working with sensitive or confidential data from multiple people, your word about how secure your systems and processes are will only go so far. However, providing a SOC Audit report from an independent auditor will immediately distinguish you from the competition, and reassure your clients that your systems and controls are safe and working effectively.
Fix Concerns, Not Issues: A potential outcome of undergoing a SOC audit is not passing, however, this is a good thing. The results from the audit will point out spots in your business that need to be fixed or updated. It is much more cost efficient and rewarding in the long run to run into these concerns now and strengthen your business practices, than to have to put out fires with clients later on.
Grow Your Client Base: When you become SOC certified, you open yourself up to those publicly traded companies that will only do business with certified providers. Since these corporations rely on investors and a large number of stakeholders, they use these audits as a measure of confidence that their information will be secured and handled properly.
Save Time and Money: Many service organizations are finding themselves at a halt when conducting business with new clients because they are requiring an audit before taking any steps. With a SOC audit, you can bypass this step and avoid multiple future audits for different clients. Better to get it done once on your own terms, than paying to repeat the same process each time a new client walks through the door.
If your business could benefit from any of these points, get a step ahead and start the process to be SOC certified today. Each report serves a specific purpose and will add value to your business by establishing instant trust and credibility in the eyes of customers. Although it will require time, money, and effort upfront, it will reward you far beyond these measures in the future.