A topic of increasing importance for many companies has been the question of how to protect valuable data. For organizations that provide services to other businesses, such as Software as a Service (SaaS) providers, payroll processing, and medical claims processing, the protection of this data is essential to the continuation of their enterprise.
For organizations that continually strive to remain up-to-date with data security best practices, finding a licensed CPA with the Advanced SOC for Service Organizations Certificate can be an industry jackpot.
Commitment to Data Security and SOC Audits
As more and more industries come to rely on cloud computing and outsourced services, protecting essential client and organizational data is of utmost importance. In just the first nine months of 2019, a total of 5,183 data breaches resulted in the exposure of 7.9 billion records across a wide range of industries, with healthcare, hospitality, and government being some of the hardest hit. And it’s not just the loss of data that adds up fast. Between investigation expenses, damage control, repairs, lawsuits, and fines, a single data breach is estimated to cost businesses an average of $3.92 million.
One way to prevent these types of large-scale data breaches is for service organizations to undergo an extensive System and Organization Controls (SOC) audit, sometimes referred to as SSAE 18 reports. During this process, an independent licensed Certified Public Accountant (CPA) tests an organization’s internal system of controls to ensure that they are adequately prepared to protect the sensitive information of the businesses who use their services, also known as user entities.
There are three types of SOC reports, each of which focuses on specific elements of an organization such as financial statements or non-financial controls pertaining to security, availability, processing integrity, confidentiality, and privacy. Depending on the opinion of the CPA who issues the report, the SOC report can be shared with user entities to provide reasonable assurance that the design and implementation of system controls are effective. It’s important for service organizations to work closely with their auditors to ensure the delivery of a successful SOC report that can identify areas for improvement to help retain and grow clients while advancing the organization’s reputation.
SOC Certification vs. SOC Report
Contrary to popular belief, service organizations do not receive a “certificate” once they complete the SOC auditing process. Some user entities expect service organizations to be able to display an award or certification displaying their adequate system controls, but no such thing exists. The only true evidence that user entities can request to review is the completed SOC report that was filed by a CPA upon completion of the audit. Along with the report will be the auditor’s opinion, which can range from unqualified (passed with flying colors) to qualified (a few issues) to adverse (ineffective controls) to a disclaimer when the auditor was not able to complete the report due to a lack of evidence.
In fact, the only existing certificate related to SOC reporting is exclusive to professionals who have advanced-level experience managing and leading SOC engagements, not the organizations undergoing the auditing process. Created by the American Institute of Certified Public Accountants (AICPA), the Advanced SOC for Service Organizations Certificate Exam is the first certificate and only of its kind, designed by leading subject matter experts to test an individual’s ability to plan, perform, and report on SOC 1 and SOC 2 engagements.
To receive the Advanced SOC for Service Organizations Certificate, experienced CPAs need to pass a competency-based advanced-level exam that verifies their ability to perform high-quality engagements in a very specialized area. According to the AICPA, “this intensive exam provides a way for practitioners to demonstrate their competencies surrounding SOC for Service Organizations engagements and to distinguish themselves in the marketplace.” To pass the timed, online, 75 multiple choice questions, CPAs must be able to evaluate and analyze core concepts related to system controls.
AICPA Digital Badge
Upon completion of the Advanced SOC for Service Organizations Certificate, recipients can display a digital badge provided by the AICPA anywhere on the internet. As the world’s largest member association for the accounting profession since 1887, the AICPA sets many national and global auditing standards for private companies, nonprofit organizations, federal, state, and local governments. They have over 412,000 members across 144 countries and a longstanding reputation for serving the public interest.
The AICPA’s digital badge helps CPAs gain recognition for earning the certificate and it also quickly signals to prospective clients and employers that the certified individual is competent in all aspects of SOC engagements. Additionally, the digital badge provides auditing firms with increased credibility and a clear commitment to high-quality data security.
Who Benefits from the Advanced SOC for Service Organizations Certificate?
Beyond just the advanced-level practitioners who manage and lead SOC engagements, the certificate provides tremendous value to user entities and service organizations alike. SOC engagements seek to bolster the design, implementation, and effectiveness of a service organization’s controls, which in turn, creates a safer environment for sensitive patient and organizational data.
Although SOC audits are technically voluntary, as there is no legal requirement for their completion, some federal regulations such as Sarbanes-Oxley, Gramm-Leach-Biley, and the Health Insurance Portability and Accountability Act (HIPAA) require corporations to audit the internal controls of their suppliers, especially those related to technology services. For service organizations in search of a reliable and experienced practitioner to conduct a thorough and accurate audit of their system controls, a digital badge that signals the completion of the Advanced SOC for Service Organizations Certificate Exam can be crucial. The effectiveness of specific internal controls can significantly impact the reputation, financial standing, and authority of a service organization, which is why it’s essential for all key stakeholders to have immediate evidence that one practitioner is able to stand out from the crowd.
At K Financial we are committed to performing the highest-quality SOC engagements for service organizations, which is why our team is comprised of experienced CPAs who have completed the Advanced SOC for Service Organizations Certificate. To learn more about how this certification can benefit your organization, contact us today.