SOC 1 (Service Organization Control 1)
User Entities: Primarily relevant to organizations that outsource processes that impact their financial statements.
Type 1 vs. Type 2 Reports:
Type 1: Reports on the suitability of the design of controls at a specific point in time.
Type 2: Reports on the operational effectiveness of these controls over a period (usually at least six months).
Examples of Use Cases: Data centers, payment processors, and other entities that handle financial transactions for client organizations.
SOC 2 (Service Organization Control 2)
Trust Service Criteria: SOC 2 reports are based on the AICPA's Trust Service Criteria, which include security, availability, processing integrity, confidentiality, and privacy.
Third-Party Assurance: Often used by technology and cloud computing organizations to provide assurance to customers about the security and privacy of their systems.
Scope Flexibility: Organizations can choose which criteria are relevant to their business and tailor the audit accordingly.
SOC 3 (Service Organization Control 3)
Public-Facing Report: Unlike SOC 1 and SOC 2, SOC 3 results in a general-use report that can be freely distributed and is often used for marketing purposes.
Trust Service Criteria: Also based on the AICPA's Trust Service Criteria, ensuring a focus on security, availability, processing integrity, confidentiality, and privacy.
Cloud Service Providers: Particularly relevant for cloud service providers looking to assure clients and stakeholders of their commitment to security and privacy.
CSAE 3416 (Canadian Standard on Assurance Engagements 3416)
Applicability to Canadian Entities: CSAE 3416 is the Canadian equivalent of SOC 1 and is used for Canadian organizations that provide services impacting their clients' financial reporting.
Convergence with SOC 1: There is significant alignment between SOC 1 and CSAE 3416, making it easier for Canadian and U.S. organizations to understand and meet both standards.
