SOC 2/AT-C 105 and 205

Cloud Computing and SOC 2

As more businesses begin to shift their interests to Cloud Computing, there are concerns regarding security-related risks.  First, let’s discuss the “Cloud”. Cloud computing is a new way of delivering computing resources, not a new technology.  Cloud computing providers give end users the ability to access applications via the internet.  As Cloud computing is achieving increased popularity, security concerns have become paramount with the adoption of this new computing model.  The effectiveness and efficiency of traditional protection mechanisms are being reconsidered as the characteristics of this innovative deployment model differ widely from those of traditional architectures.

Read More

Value of the SOC 2 for Service Organizations

If your service organization processes customer transactions that impact financial reporting, such as payroll or other financial reporting function, you are more than likely familiar with the SSAE 16 SOC 1 report and its predecessor the SAS 70. Your customer’s auditors request the SAS 70, now the SSAE 16, every year to fulfill your customer’s year-end financial statement audit requirements. You gladly undergo the annual SSAE 16 audit so you have the report ready for your customers each year. One SSAE16 audit is worth keeping an army of customer auditors from knocking on your door asking for the same evidence of internal controls. More than likely the SSAE 16 is also required to meet contractual obligations to your customers. So to reduce the number of audits you have to endure each year, to meeting contractual obligations and also to get an independent evaluation of your internal controls, you engaged a CPA firm to perform the SSAE 16 audit.

Read More

SOC 2 – Not your prior year SAS 70

After a 20 year reign as the service auditor’s report, the SAS 70 was retired this summer with much fanfare. After being used to communicate the design, implementation and operating effectiveness of controls at every type of service organization imaginable, the AICPA published new standards that better align the type of service organization and service provided to the report used to communicate the design, implementation and operating effectiveness of controls to the user of the report.

Read More

SOC 2 and Subservice Organizations

SOC 2 AND SUBSERVICE ORGANIZATIONS After a review of the new SOC 2 guide, Reporting on Controls at a Service Organization, I noticed that the responsibilities of the service auditor, service organization and subservice organization all seem to have increased when it comes to how subservice organizations may be considered / treated under the new standard.  Trying to get all three parties on the same page is a daunting feat in itself and I wanted to take a moment to share some of the highlights. The inclusive and carve-out method can still be used for subservice organizations just as in SOC 1.

Read More