Service Organizations: SOC 1 SOC 2 and Soc 3. Information Systems and Controls ISC CPA Exam

In this video, we discuss service organizations SOC 1, SOC 2 and SOC 3 as covered on the Information Systems and Controls ISC CPA exam.
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SOC stands for Service Organization Control. SOC reports are issued by independent auditors to assess and report on the internal controls of service organizations. There are three types of SOC reports: SOC 1, SOC 2, and SOC 3. Here's an overview of each:
SOC 1 (SSAE 18):
Purpose: SOC 1 reports are designed to provide assurance about the effectiveness of a service organization's internal controls over financial reporting. They are primarily used by service organizations that provide services that could impact their clients' financial statements.
Scope: The scope of a SOC 1 report typically focuses on controls related to financial reporting processes, such as transaction processing, account reconciliations, and financial statement preparation.
Audience: SOC 1 reports are typically intended for use by the service organization's customers, their auditors, and regulators. They provide assurance to these stakeholders that the service organization's controls are operating effectively and that their financial statements can be relied upon.
SOC 2:
Purpose: SOC 2 reports are designed to provide assurance about the effectiveness of a service organization's controls related to security, availability, processing integrity, confidentiality, and privacy (Trust Service Criteria). They are commonly used by technology and cloud service providers to demonstrate their commitment to security and privacy.
Scope: The scope of a SOC 2 report can vary depending on the services provided by the organization. It typically includes controls related to the security, availability, processing integrity, confidentiality, and privacy of customer data and systems.
Audience: SOC 2 reports are typically intended for use by a broader audience, including current and prospective customers, business partners, and other stakeholders who need assurance about the security and privacy practices of the service organization.
SOC 3:
Purpose: SOC 3 reports are similar to SOC 2 reports in terms of assessing controls related to security, availability, processing integrity, confidentiality, and privacy. However, SOC 3 reports are designed for general use and are intended to be publicly available.
Scope: Like SOC 2 reports, the scope of a SOC 3 report can vary depending on the services provided by the organization. It typically includes controls related to security, availability, processing integrity, confidentiality, and privacy.
Audience: SOC 3 reports are intended for a broad audience, including current and prospective customers, business partners, regulators, and the general public. They provide a high-level summary of the service organization's controls and can be used to demonstrate compliance with industry standards and regulations.
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