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SOC reports Proving security building trust

INFOGRAPHIC | February 06, 2023 | Authored by RSM US LLP

The reality in today’s business environment is that the threat of a data breach is high, and no business wants the stress and expense of managing a cyberattack. Smart companies are proactively prioritizing protective systems that shield their enterprise IT. The first step many of them are taking is a readiness review called a Service and Organization Control (SOC) report.

These independent audits help a business understand and manage their risks—and measure trust through key areas of their data’s lifecycle. This infographic explains the three types of SOC reports and how they measure whether data:

  • is secure, confidential and private throughout its lifecycle—including during creation, collection, processing, transmission and storage
  • is available
  • has process integrity

Explore which type of SOC report is best for your business and the ROI an audit can deliver—including additional process transparency, cybersecurity premium cost savings and increased customer trust.

According to IBM’s “Cost of a Data Breach” report:1

In 2022, the average cost of a data breach in the U.S. topped

$9.44 million

83%

of organizations suffered more than one breach in 12 months

45%

of breaches were cloud-based

19%

of breaches occurred because of a compromise at a business partner

To better manage risks, businesses want vendors and service providers to verify the strength of their internal controls, driving a surge in demand for the independent audits known as Service Organization Controls (SOC) reports.

The Association of International Certified Professional Accountants survey found that:2

Between 2018 and 2020:

49%

Demand for SOC 2 audits grew

8%

SOC 1 exams—already strong—rose

44%

SOC 2 readiness assessments rose

29%

SOC 1 readiness assessments climbed

Which SOC report fits?

There are three SOC reports most leveraged in the market today. Which type do you need?

If you need to…

Process transactions or manage an outsourced function that impacts your customers’ financial statements

You’ll need…

SOC 1

Provides transparency into internal controls over financial reporting

If you need to…

Are responsible for systems that manage, hold, or process client data

Serve, or want to attract, large organizations

Operate in a highly regulated environment

You’ll need…

SOC 2

Centralizes the testing of an organization’s security environment for external parties

If you need to…

Want to share results publicly in marketing material or on your website

You’ll need…

SOC 2

Provides attestation of controls that can be shared publicly

Attesting to trust with SOC 2

SOC 2 reports leverage a framework of five trust services categories:

Security

Controls relate to protecting data from unauthorized access/disclosure and other cybersecurity-related risks during the collection or creation, processing, transmission, and storage of data.

Availability

These controls ensure systems are reliable and available to clients, employees, and customers when they need them.

Processing integrity

These standards relate to system processing, specifically if your system works properly and provides timely, accurate data.

Confidentiality

These controls and standards govern how confidential information is managed, including creation through its final disposition/removal and classification and protection by limiting access, storage, and use.

Privacy

Control activities for how personal information is collected, used, retained, disclosed, and disposed of based on the entity’s objectives.

The ROI of SOC

SOC audits offer a broad view into the mechanics of an organization that can inform strategic planning and spur growth. Top benefits of SOC reporting include:

Satisfy customer demand

Validates the safety of customer data from unauthorized access and theft

Cost effectiveness

Can reduce security breaches, minimize efforts related to annual security due diligence, and lower cybersecurity insurance premiums

Competitive advantage

Provides an edge in winning bigger customers by sharing verification upfront

Visibility and transparency

Yields valuable insights about:

  • Organizational risk and security posture
  • Vendor management processes
  • Internal controls governance

Validating systems and controls

To gain a competitive advantage and build trust with current and future clients, SOC reports can begin your journey to validate your systems and controls. You will also want to work with an experienced firm that can direct the entire process and offer strategic insights along the way,

Learn more about SOC reports in RSM’s whitepaper, “Effective SOC reporting: Understanding your company’s options” or visit our Service Organization Controls solutions web page.


1. IBM, “Cost of a data breach 2022
2. Association of International Certified Professional Accountants, “SOC Survey,” 2022

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This article was written by RSM US LLP and originally appeared on Feb 06, 2023.
2022 RSM US LLP. All rights reserved.
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