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.
Organizations occasionally receive questions on security standards from (prospective) clients; what are the differences between an ISAE 3402 (SOC 1), ISAE 3000 (SOC 2) and an ISO 27001 audit? Which standard is more applicable to our company, ISAE or ISO 27001? What are the advantages and disadvantages of ISAE vs. ISO 27001?
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).
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.
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.
Organizations are continuously searching for opportunities to exploit competitive advantage to increase markets and profits. Organizations are increasingly outsourcing non-core business functions. Nonetheless, is management ultimately responsible for risk management and the implementation of an effective control framework. This has led to increased demand for control assurance by standards such as ISAE 3402 or ISAE 3000 for activities performed by third parties