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SOC 2 (Service Organization Control) reports are internal control reports on the offerings furnished by a service organization. Learn all about SOC 2 Reports at https://www.datatechitp.com/2015/02/soc-2-compliance-what-is-it-and-why-should-you-care/ SOC 2 reports provide important information for users to appraise the risks involved with an outsourced service. They're essential for service providers to build trust with clients, as they are performed by an independent third party: a Certified Public Accountant. SOC 2 reports focus on service providers that host or store considerable amounts of data, ensuring that they are following industry best practices and their operations are up to code. These reports are only shared under an NDA (non-disclosure agreement), and are generally not for public use. Service organizations can choose which type of SOC 2 audit to undertake: Type 1 or Type 2. An SOC 2 Type 1 report is basically a layout of procedures and controls that the service provider has established as of a certain point in time. An SOC Type 2 report includes all of the information in Type 1, but also supplies evidence as to how effective those procedures and controls were over a specified period of time. The audit period in a Type 2 report is typically no less than six months—enough time for a comprehensive evaluation. This provides more valuable information because the auditor is able to substantiate that the controls in place are actually functioning as advertised. SOC 2 Type 2 compliance is an outstanding measuring stick for business owners and decision makers because it provides them with the peace of mind that the service provider that they choose can competently deliver what it promises. Compliance is particularly effective because verification is conducted by a neutral third party. Decision-makers can rest easy, knowing that their provider has undergone highly thorough audits to make sure that customer data is protected and in good hands.
