The Benefits of a SOC 3 Report

A SOC 2 report assesses an organization’s internal security controls and systems designed to safeguard information. It’s one of the most popular types of assessments, along with a SOC 1 report which evaluates internal controls over financial reporting. Perhaps not as well known, but just as advantageous, is a SOC 3 report.  

In this blog, we’ll explain the details of a SOC 3 report, its applicability, and the benefits it provides to an organization.  

What Is a SOC 3 Report? 

A SOC 3 report is a report on the internal security controls at a service organization addressing matters other than financial reporting. It is prepared following an audit using the SOC Trust Services Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy.  

If a SOC 3 report sounds a lot like a SOC 2 report, it’s because they are essentially the same document with one exception: A SOC 3 report does not provide the security controls nor details of the tests performed by the service auditor (Section 4 of the SOC 2 report). 

In essence, a SOC 3 report is simply a public-facing abridged version of a SOC 2 report. Worth noting, while a SOC 2 audit can be completed as a Type 1 (point in time assessment) or Type 2 (historical lookback assessment), a SOC 3 is only possible as a Type 2.  

A SOC 3 report allows an organization to share their SOC 2 but without publicizing confidential information.  Whereas a SOC 2 report is a restricted-use report and intended for a specific, limited audience, a SOC 3 report can be utilized as a public-facing document meant to generate trust and confidence in an organization’s information security management system.   

The Components of a SOC 3 Report 

There are three main components of a SOC 3 report. These include: 

1. The service auditor’s report on whether the entity maintained effective controls over its system as it relates to any of the categories being evaluated: 

• Security refers to the protection of information throughout its lifecycle. Security controls include a range of risk-mitigating solutions like endpoint protection and network monitoring tools to prevent or detect unauthorized activity. Any SOC evaluation must include the Security Category; it is required unlike the other four Categories. 
• Availability refers to operational uptime and performance to meet stated business objectives and service level agreements. The Availability Category addresses whether systems contain controls to support and maintain system operation, such as performance monitoring, data backups, disaster recovery plans, and environmental protections around any infrastructure hosted onsite. 
• Confidentiality refers to the demonstrated ability to protect confidential information throughout its lifecycle, including collection, processing and disposal. Controls for Confidentiality include encryption, as well as identity and access management, data retention and data disposal. 
• Processing Integrity refers to assurance that data is processed in a predictable manner, free of accidental or unexplained errors. Due to the sheer quantity of controls typically leveraged, Processing Integrity is usually only evaluated at the system or functional level.  
• Privacy refers specifically to Personally Identifiable Information (PII), especially PII an organization captures from customers. The Privacy Category targets controls over communication, consent, collection of personal information, and verifies appropriate parties are able to access PII.  

2. The management’s assertion that the controls were suitably designed and effective to achieve control objectives throughout the specified time period. 

3. A brief description of the aspects of the system assessed so that the boundaries of the system are clear, and the scope of the audit is defined. This is important as an unclear description can lead to confusion as to what exactly the service auditor has evaluated. 

4. Again, a SOC 3 report does not provide information on financial reporting, security controls or details of the test performed by the service auditor.  

The Benefits of a SOC 3 Report 

As a general use report, a SOC 3 can be freely distributed or posted on a website as a seal of an organization’s commitment to information security. This is in stark contrast to a SOC 2 which is a “restricted use report”, meaning that only customers and third parties such as financial institutions, vendors, and user auditors should be granted access to the report upon signing a non-disclosure agreement (NDA).  

Remember, Section 4 of a SOC 2 contains details on the security controls an organization has implemented; it’s something that is best kept confidential. A SOC 3 omits Section 4 and serves as a brief summary of a SOC 2. As such, there are no such restrictions on its use. For this reason, it’s common for organizations undergoing a SOC 2 audit to ask for a SOC 3 report to go along with it.    

As a is a licensed CPA firm and one of the top issuers of SOC 2 reports in the world A-LIGN can be trusted to guide you every step of the way through the assessment process.  

Think you’re ready to evaluate your information security management systems? Check out this article on Five Easy Steps to Get Started With Your SOC 2 Audit.