What does the "SOC" acronym refer to with audit reports?
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The "SOC" acronym in audit reports refers to "System Organization Control." SOC reports are a series of audit reports that provide detailed information on the internal control environment of a service organization. The reports are designed to help customers and stakeholders evaluate the effectiveness of the controls that the organization has put in place to manage its services.
SOC reports are typically issued by an independent third-party auditor and are based on the standards established by the American Institute of Certified Public Accountants (AICPA). There are three different types of SOC reports, each with a specific focus:
SOC 1: Reports on Controls at a Service Organization Relevant to User Entities' Internal Control Over Financial Reporting. This report is primarily used to evaluate the effectiveness of the financial reporting controls of the service organization.
SOC 2: Reports on Controls at a Service Organization Relevant to Security, Availability, Processing Integrity, Confidentiality, or Privacy. This report is used to evaluate the effectiveness of the controls related to the security, availability, processing integrity, confidentiality, and privacy of the service organization.
SOC 3: Trust Services Criteria for General Use Report. This report is a general-use report that provides a summary of the service organization's controls related to security, availability, processing integrity, confidentiality, and privacy.
In conclusion, SOC refers to System Organization Control in audit reports, and SOC reports provide a detailed evaluation of the controls that a service organization has put in place to manage its services.