Do you need a SOC report? Here’s how to get one

As cyber threats grow, so does the demand for transparency in how businesses manage security and compliance. Many clients and partners now require a System and Organization Controls (SOC) report as a condition for doing business. Obtaining one can demonstrate trust, strengthen data protection, and validate compliance with industry standards.

SOC reporting independently evaluates an organization’s assertions. Assertions could include that the organization has the proper controls to protect sensitive data, can accurately process financial transactions, or can address supply chain risks. This step-by-step guide explains the SOC engagement process.

What is a SOC Report?

Governed by the American Institute of Certified Public Accountants (AICPA), a SOC report evaluates an organization’s controls over services impacting its customer’s financial reporting (SOC 1) or security and other objective criteria (SOC 2). To receive a SOC report, an organization must undergo an independent evaluation or testing by a Certified Public Accounting (CPA) firm over the design and effectiveness of controls to process transactions or protect client data and assets.

SOC reports help businesses:

• Meet contractual and regulatory requirements
• Minimize the trust gap with customers
• Proactively manage risk
• Enhance control maturity

Step 1: Understand the Right SOC Report for Your Business

Different SOC reports serve different business needs. Selecting the right one depends on your industry, services, and client expectations.

Type 1 vs. Type 2 Reports

• Type 1: Evaluates the control design at a specific point in time.
• Type 2: Tests control effectiveness over a defined period (e.g., six months to a year).

Many businesses start with Type 1 to establish compliance, then transition to Type 2 for ongoing validation.

Step 2: Choose a Qualified Firm

Selecting the right firm is an important part of the process. A CPA firm with SOC engagement experience will:

• Conduct a thorough control assessment
• Identify gaps and risk areas
• Advise your team in aligning systems with SOC requirements

Look for firms that specialize in your industry, understand regulatory requirements, and provide ongoing support beyond testing and reporting.

Step 3: Conduct a Readiness Assessment

A readiness assessment identifies potential weaknesses before the formal SOC engagement begins, reducing the risk of costly delays. This step involves:

• Evaluating current controls – Reviewing security policies, access controls, and risk management procedures.
• Identifying gaps and risks – Pinpointing areas that need improvement.
• Mapping controls – Aligning security measures with SOC reporting criteria.
• Developing a remediation plan – Implementing necessary changes to strengthen compliance.
• Setting a timeline – Defining clear milestones for completing improvements.

A thorough readiness assessment helps reduce exceptions, making the SOC engagement process smoother and more efficient.

Step 4: Define the Scope of Your SOC Engagement

To streamline the process, work with your CPA firm to set clear expectations by:

• Systems and services covered – Identify which applications, databases, and processes are included.
• Control categories – Determine focus areas such as security, confidentiality, or availability.
• Specified period – Choose the reporting timeframe (e.g., six months or a full year).
• Client requirements – Align scope with customer expectations and compliance needs.

Proper scoping helps prevent delays and unnecessary complexity, keeping the engagement focused on relevant areas.

Step 5: Implement and Document Controls

Once the scope is established, documenting security practices is important. This includes:

• Formalizing policies and procedures – Clearly documenting security and operational controls.
• Deploying technical safeguards – Installing firewalls, encryption, monitoring tools, and access controls.
• Assigning responsibilities – Identifying team members overseeing compliance and risk management.
• Training employees – Educating staff on security best practices and compliance protocols.
• Maintaining records – Storing control documentation for CPA testing.

Well-documented processes help reduce findings and strengthen compliance.

Step 6: Conduct the SOC Engagement

During the engagement, your CPA firm will test whether controls function as expected and conduct:

• Interviews – Speaking with key personnel about control implementation.
• Documentation reviews – Examining security policies and operational procedures.
• Testing procedures – Validating system effectiveness over time.

After testing, the CPA prepares a SOC report summarizing findings, including any recommended improvements.

Step 7: Address Findings and Maintain Compliance

If the engagement uncovers deficiencies, take corrective action by:

• Updating policies – Refining security protocols.
• Enhancing training – Reinforcing employee awareness.
• Strengthening controls – Implementing new security measures.

Maintaining compliance requires ongoing monitoring and periodic testing to adapt to regulatory and business changes.

Step 8: Share Your SOC Report

Once completed, your SOC can be shared with:

• Clients and prospects – Demonstrating security commitment.
• Stakeholders and investors – Strengthening business credibility.
• Regulators and compliance teams – Meeting industry requirements.

SOC reporting enhances trust, reduces vendor risk concerns, and opens new business opportunities.

Why Work with Elliott Davis?

Starting the SOC reporting process can feel overwhelming, but working with experienced professionals can make all the difference. At Elliott Davis, we specialize in SOC engagements, readiness assessments, and compliance consulting, helping businesses communicate their controls efficiently.

What We Offer:

• Expert guidance through every stage of the SOC process
• Industry-specific knowledge to make compliance easier
• Readiness assessments to reduce engagement risks
• Clear strategies for achieving SOC reporting

Let’s strengthen trust and security together. Contact us today to get started.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.