What is SOC 3? Everything You Need to Know
When everything happens online, nothing matters more than building and maintaining customer trust. If your organization handles any kind of sensitive data, you can’t afford to be wishy-washy about protecting it. Once you’ve understood the importance of security, let’s say you’ve taken the necessary steps to achieve SOC 1 or SOC 2 reports, but what more can you do to bolster up this achievement? This is where a SOC 3 report comes in.
What is SOC 3?
A SOC 3 report is specifically meant to be a public facing document that provides a summary of an organizations controls. It is a general-use report, unlike the more restricted SOC 1 or SOC 2 reports. Organizations can use a SOC 3 report to assure customers, stakeholders, and general public that their systems meet specific trust service criteria.
READ MORE: SOC 1 vs SOC 2 vs SOC 3: Understanding the Differences
The report confirms the effectiveness of controls relevant to the 5 trust service criteria. This assurance is based on an independent auditor’s opinion following an evaluation of the controls over a specified period, usually 12 months. It’s a testament to operational excellence and a strategic tool for marketing and business development.
Components of a SOC 3 Report
The structure of a SOC 3 report is designed for clarity and broad distribution. It includes several key components:
Management’s Assertion: A declaration by the service organization's management detailing their responsibility for the system and the fairness of the control description. They assert that the controls were effective throughout the reporting period.
Independent Service Auditor’s Report: This is the core of the report. The CPA firm (auditor) provides their opinion on whether management's assertion is fairly stated. This opinion is unqualified (clean) when the controls were effective, providing the highest level of assurance.
System Description (General): A concise, non-technical overview of the service organization's system, its services, the principal controls, and the applicable Trust Service Criteria. Unlike the detailed SOC 2 description, the SOC 3 version is brief and focuses on the scope.
Applicable Trust Service Criteria: The report identifies which of the five criteria (Security, Availability, Processing Integrity, Confidentiality, Privacy) were addressed by the audit. Security is a mandatory baseline criterion for all SOC 2 and SOC 3 reports.
Who Needs a SOC 3 Report?
The SOC 3 report serves specific strategic needs:
Service Organizations Targeting the Public: Any service provider, particularly those in the SaaS (Software as a Service), data center, managed IT services, or cloud computing sectors, benefits immensely from a SOC 3.
Organizations Seeking Public Credibility: Companies wanting to publicly display their adherence to high standards of internal control often choose the SOC 3. It's an excellent inclusion for a company's website or marketing materials.
Service Organizations That Already Have a SOC 2: Since a SOC 3 is essentially a summarized, general-use version of a successful SOC 2 (Type 2) report, organizations that have already undergone the rigorous SOC 2 audit find the SOC 3 a straightforward, value-added deliverable.
When Should You Consider a SOC 3 Report?
Timing the decision to pursue a SOC 3 aligns with business strategy and maturity:
After Achieving SOC 2 Type 2 Success: A SOC 3 report is issued only after a successful SOC 2 Type 2 audit. Organizations should first complete the in-depth, restricted-use SOC 2 Type 2. The SOC 3 then becomes the logical next step for public communication.
During Competitive Bidding: When potential customers require proof of control assurance but don't need the detailed, proprietary information contained within a SOC 2, the SOC 3 serves as a perfect, easily shareable validation.
For Marketing and Transparency Initiatives: Consider the SOC 3 when launching major marketing campaigns emphasizing trust, security, and compliance. Its public nature reinforces a strong commitment to transparency and operational integrity.
Johanson Group Can Help Obtain a SOC 3 Report
Securing a SOC 3 report requires expert guidance through the complex audit process. Johanson Group specializes in helping service organizations achieve their assurance goals. As a qualified CPA firm, we perform the necessary SOC 2 Type 2 examination. Upon a successful, unqualified opinion, we prepare the resulting SOC 3 report.
