An audit of a company’s controlling mechanisms that are in place to help assure the security, availability, processing integrity, confidentiality, and privacy of their customer’s data is referred to as a system and organization control audit or, simply put, a SOC audit. In addition, these audits provide an independent examination of the risks involved with external services from other organizations. In other words, SOC audit reports are crucial in compliance monitoring, vendor management, corporate governance, and risk assessment.
A SOC report is created after an independent auditor examines an organization to evaluate if it has an effective system of controls over its clients’ sensitive information. The report delivers an appropriate level of assurance about controls’ design and operational efficacy and outlines any risks for clients or business partners considering working with the organization.
Different service companies’ control systems and services may affect the nature and scope of SOC reports – the most common ones being SOC 1 and SOC 2 reports. For example, the SOC 1 report focuses on a service organization’s business process, and IT controls that may affect user financial statements. In a SOC 2 report, a service organization’s security, availability, processing integrity, confidentiality, and privacy measures are examined and reported on in great detail.
So why should you consider performing a SOC audit in your company? Here are five ways in which your organization can benefit from it.
It Helps Minimize The Risk
Businesses can invest in a SOC audit and its associated parts without fully realizing the scope of their potential return on investment. The organizational and commercial risk may be controlled, managed, and minimized in stable operating settings with strong controls. Risks to the company’s image and reputation, finances, suppliers, and even employees may all be mitigated by taking this step.
A SOC Audit Can Help You Build Trust With Your Customers
Your service organization’s risk and security posture, internal control governance, and compliance with applicable regulations may all be better understood with the help of a SOC. Customers’ faith is crucial to the success of any service provider.
For example, customers may stop doing business with you if they learn about a data breach in your company’s history or anticipate one in the future. This might result in a catastrophic loss of revenue and even the company’s demise. Customers will feel more comfortable knowing their information is secure with your company.
Some clients will ask for a SOC 2 report before they decide to do business with your organization. In that regard, as this type of client usually comes with enormous revenue-growth potential, you better be prepared with a SOC audit at all times. Even customers who do not require SOC 2 compliance will have more faith in you as a solution if they are aware that you have rock-solid security practices. Consequently, it makes you more appealing to people you are already marketing to.
It Makes Your Company Stand Out
Your competitors may assert they are secure, but they cannot demonstrate this without an audit. A SOC 2 report can set your company apart from rivals who haven’t made the same commitment to improving their systems. To differentiate yourself from competitors, emphasize how strictly you stick to standards.
It Will Definitely Help You Win Some New Clients
Furthermore, you can save precious time by having a ready SOC audit report when interacting with your client’s business strategists. If they have their own auditor, you can expect them to rely heavily on this report.
On the other hand, expect them to ask a lot of questions or perhaps request an on-site assessment of your operations, processes, and controls if you don’t have a SOC audit. This may cause significant stress for you and your staff, and it may also hurt your business’s current clients if delays or mistakes are introduced into ongoing projects.
A SOC Audit Will Protect You From Future Losses
You can avoid future hassle and potentially crippling fines by investing in your company’s overall security today. In this day and age where hackers and data breaches are widespread, it is crucial that your company is SOC 2 compliant.
The financial and reputational implications of a data breach skyrocket along with the company’s size. Half of all attacks resulted in over $6 trillion in losses due to things like missed revenue, clients, opportunities, and out-of-pocket costs. The most common areas of damage were intellectual property, operations, finances, and brand reputation. The moment to start thinking about security is now.
Final Thoughts
SOC audits are an independent look at the risks that come with using third parties and service organizations. They are very important for keeping an eye on compliance, managing vendors, running the business, and figuring out risks.
Fortunately, SOC audits are typically straightforward and will give you and your consumers peace of mind regarding the strength of your security procedures. A SOC report can help your company avoid potential problems and financial losses while also increasing customer confidence in your operations.