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How do you improve and professionalize a SOC report?

Systems and Controls – SOC reporting is all about controls. An ISAE 3402 SOC 1 reporting for financial outsourcing, such as asset management, SaaS-providers (financial software), datacenters (storage of financial data). ISAE 3000 (SOC 2) reporting is focused at a broader IT scope, for user organizations with additional requirements on security, availability, processing integrity, confidentiality and privacy. These criteria are known as; Trust service Criteria or Trust Service Principles.

Agency Theory in outsourcing

Organizations have been dealing with how they can exploit their competitive advantage since the industrial Revolution to increase markets and their profits in these markets. The most important model in the 19th and 20th century was the large integrated organization. In the 50’s and 60’s corporate bases were more broadened to profit from economies of scale.

ISAE 3402

The ISAE 3402 standard, is an international recognized auditing standard issued by the international Auditing and Assurance Standards Board (IAASB). A service organization's auditor's examination is widely accepted, because it represents an in-depth audit of a service organization's control objectives and activities. The control framework and related controls are in detail included in the Systems and Organization Report (SOC).

SOC1 & SOC2

The general and most common term for reporting on third-party risks by service organizations to user organizations is Systems and Organization Control Report or SOC-report. This term is originated by the American Institute of Certified Public Accountants (AICPA) as a replacement for the SAS70 framework.

Third Party Risk and ISAE 3402

From full outsourcing of complex functions like IaaS, PaaS services or component manufacturing to small contracts with local service providers and suppliers, organizations in different industries with different magnitude rely heavily on third-party service organizations.

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