Insight into SOC Reports for Service Organizations

Why do data centers need to adopt the SOC  Report Framework?

In our earlier blog, we explained in detail the different SOC reports that service organizations file for outsourced services. In this blog, we will talk about the need to do so.

The American Institute of Certified Public Accountants (AICPA) Service Organization Control (SOC) reporting framework for service organizations consists of SOC 1, SOC 2, and SOC 3 reports.  While SOC 1 reporting is geared towards controls relevant to financial reporting, SOC 2 and SOC 3 reports cater to internal controls outside that of financial reporting.

Organizations opting for these assessments have a qualified auditor draw up a report on the service organization based on the parameters specified in the reporting requirements. SOC 2 and SOC 3 reports are based on the five Trust Services Principles  (TSP) of: Security, Availability, Processing Integrity, Confidentiality  and Privacy. The actual report itself is broad-based and flexible, with the TSPs providing only a framework. The auditors undertake a mock examination and draw up a readiness assessment based on the examination.

SOC reports are not mandatory, and they have more to do with internal controls rather than statutory compliance. However, data centers would do well to undertake these reports, for the following reasons.

• It sheds light on the efficiency of the data center, such as details of uptime, accuracy of processing, and comparison of stated promises and actual availability or performance.
• It gives an insight into the security system in place in the data center, especially the extent to which the systems are protected against unauthorized access and other threats, the measures in place to protect confidential or personal information and more.
• It confirms whether the data center collects and use personal information in conformation with the declared in-house privacy principles and statutory requirements.

Using SOC 1, 2, and 3 reports, the data center can clearly  articulate the specific services they offer and internal control processes they adopt to their clients. Outsourcing data to a data center does not wish away liability connected with the data, especially statutory compliance and data protection requirements.  By outsourcing to data centers that subject themselves to SOC attestation reports, clients can evaluate the extent to which the data center meets their requirements and fulfill liabilities on their behalf.

Let the compliance experts at Lifeline Data Centers help you solve your  SSAE 16, TIA-942, NFPA, HIPAA, FIMSA, FDA, PCI/DSS and Sarbanes Oxley  audit problems. Lifeline delivers multi-level compliance solutions in  audit-ready data centers with in-house expertise. Learn more.

Alex Carroll

Managing Member at Lifeline Data Centers

Alex, co-owner, is responsible for all real estate, construction and mission critical facilities: hardened buildings, power systems, cooling systems, fire suppression, and environmentals. Alex also manages relationships with the telecommunications providers and has an extensive background in IT infrastructure support, database administration and software design and development. Alex architected Lifeline’s proprietary GRCA system and is hands-on every day in the data center.