If you’re a business owner working with third-party vendors, specifically those handling data or financial transactions, you’ve probably experienced requests for or received a SOC report. Short for “System and Organization Controls reports,” these are essential for verifying that service providers maintain secure and reliable systems.

But understanding the answer to the question “What is a SOC report?” is only the start. While many companies know they need a SOC 1 or SOC 2 report, few understand how to review them properly or what to do once they receive them. 

Becoming more informed is a vital part of managing your risk and building trust. In our latest article, we explore SOC reports in-depth, covering the differences between SOC 1 and SOC 2, what to look for in an audit, and how to interpret the findings to protect your organization.

What Is a SOC Report?

A SOC report is a confirmation from an independent auditor that a service organization has established internal controls to safeguard its systems and data. Issued by licensed CPA firms and governed by the American Institute of Certified Public Accountants (AICPA), these reports assess whether a company’s controls are appropriately designed and functioning effectively

Broadly, SOC reports are requested by businesses, known as user entities, that rely on external vendors for services such as payroll, IT infrastructure, or cloud storage. The goal? To understand whether those services can be trusted, especially when it comes to data security, financial reporting, or system availability.

A well-reviewed SOC report can help prevent costly errors, protect customer trust, and satisfy regulatory scrutiny. But understanding what’s actually inside these reports, and how to interpret them, is key.

Categorizing SOC Reports

SOC 1 vs. SOC 2: Key Differences

Two of the most commonly requested reports are SOC 1 and SOC 2, but they serve two distinct purposes.

A SOC 1 report focuses on controls affecting internal controls over financial reporting (ICFR). This is particularly pertinent if your business offers services such as billing, claims processing, or payroll—essentially anything that may directly influence your company’s financial statements.

In contrast, a SOC 2 report is more suitable if you are a technology and cloud-based service provider. It evaluates controls based on five Trust Services Criteria:

• Security (mandatory)
• Availability
• Confidentiality
• Processing Integrity
• Privacy

Organizations that handle customer data, including Saas platforms and managed IT services, often need to present a SOC 2 report to demonstrate their ability to effectively safeguard that information.

Type I vs. Type II Reports

Both SOC 1 and SOC 2 reports come in two types:

• Type I reports evaluate the design of controls at a specific moment in time.
• Type II reports assess both the design and operating effectiveness of those controls over a period, typically ranging from 6 to 12 months.

Type II reports offer more value, especially for ongoing vendor management or long-term partnerships, because they reveal how consistently your company actually applies the appropriate controls.

What About a SOC 3 Report?

While companies get SOC 1 and SOC 2 reports for detailed internal reviews and are typically restricted to clients or auditors, SOC 3 reports serve a different purpose.

A SOC 3 report is meant for public distribution. It covers the same Trust Services Criteria as a SOC 2 (such as security, availability, and confidentiality), but it omits sensitive details, including control testing procedures and specific exceptions. 

This makes SOC 3 ideal for marketing or building trust on your company’s website, where prospective customers can see that an independent audit has been completed without exposing operational specifics. 

If you're looking to demonstrate security compliance to a broader audience without revealing too much, a SOC 3 is a valuable complement to your SOC 2 report.

Understanding What’s Included in a SOC Report

Understanding the contents of a SOC report helps you to read it with confidence. Most reports contain the following core components:

Auditor’s Opinion

Found in Section I, this outlines whether your company’s controls are suitably designed and/or effective. In this section, you want to see “unqualified opinion” in your report. And if your auditor indicates “adverse” or “disclaimer of opinion”, this indicates issues that require closer scrutiny.

Management Assertion

In Section II, the service organization asserts that your business has an accurate system description and that your team correctly implements the outlined controls. If this is missing or doesn’t align with the auditor’s findings, that’s a red flag.

System Description

Section III outlines the systems and services in scope, the locations where controls were tested, and descriptions of relevant processes. Pay close attention to ensure that the systems your company uses are indeed covered.

Testing and Results

In the final section, the auditor outlines each control, how it was tested, and whether it passed. It’s not uncommon to find exceptions, but understanding their significance and whether they were addressed is vital.

Reviewing Your Company’s SOC Report Effectively

Who Should Review

Typically, both internal and external auditors are the first to review SOC reports, particularly during audits or vendor due diligence. However, management teams, compliance officers, and IT leaders also have a vested interest in the review. 

Remember, if a vendor is part of your core infrastructure, you need to assess whether their operations fulfill your security and compliance expectations.

Business leaders should also ensure that their teams review these reports regularly, not just once and then forget about them. SOC reports should become part of your vendor management and third-party risk program.

How To Review

Reading a SOC report without a clear review strategy can feel overwhelming. Here’s what business leaders and compliance teams should focus on:

Start with the Scope and Period

Ensure the report addresses the appropriate systems and services, particularly if a vendor offers multiple products. Verify the audit period since an outdated report may not accurately reflect current practices. If necessary, request a bridge letter to cover any gaps between audit periods.

Verify the Subservice Organization Treatment

Many service organizations rely on other providers. For example, a SaaS company may use AWS for hosting. The SOC report will indicate whether these subservice organizations are included (inclusive method) or excluded (carve-out method) from the SOC audit. If critical services are carved out, your business may need to request their SOC reports separately.

Evaluate Complementary User Entity Controls (CUECs)

SOC reports often include a list of controls for which your company is responsible. These may include measures such as restricting admin access or enabling multi-factor authentication. If these are not implemented on your side, the overall control environment might not function as intended, even if the vendor’s controls are robust.

Assess the Exceptions and Responses

Not every test will pass, and that’s okay. As long as the vendor has documented the issue, explained the root cause, and described a remediation plan, it’s OK that you don’t pass every single test. 

Consider how each exception might impact your business. Was the affected control critical? Is the issue ongoing or resolved?

When to Ask Questions (and What to Ask)

Once you’ve received your SOC report back, it’s crucial you ask any questions or bring up concerns if the audit is unclear. Whether it's a vague exception, a missing service, or an outdated audit period, ask your vendor. 

A reputable and reliable SOC 2 auditor will want to help answer all your questions and support you in closing your company’s gaps. SOC reports are complex documents, and even experienced auditors may need clarification from time to time. Be proactive and maintain open communication. Questions to consider include:

• Why is a key system not covered in this SOC report?
• Can you provide a bridge letter for the gap in coverage?
• Has the issue noted in the exception been remediated?
• Are your sub-service providers SOC compliant?

Turn SOC Reports Into Strategic Assets

SOC reports aren’t just technical documents; they’re strategic tools! 

Whether you need a SOC 1 or SOC 2, they help you determine whether a service provider is trustworthy, resilient, and aligned with your own compliance and risk goals. And when correctly reviewed, they offer insight not just into the vendor’s systems, but into how your internal controls interact with theirs.

By learning the essentials of SOC reporting and how to read and evaluate the different audit reports, you’re protecting your business. Furthermore, you’re building a more secure and trustworthy outlook for your company. 

Use these reports to ask better questions, improve your internal policies, and ensure that the vendors you depend on are truly up to the task.

At Securisea, we help organizations like yours prepare for and navigate SOC 1, SOC 2, and other compliance audits. With over 20 years of SOC auditing expertise, we offer professional guidance, gap assessments, and full-scope assurance services to each client. 

Whether you're reviewing a vendor's report or preparing your own, our team ensures all the security frameworks meet today’s most rigorous standards. Talk to a Securisea Expert and take the next step toward a more innovative strategy and stronger compliance to grow your business efficiently.

For cloud service providers (CSPs) seeking to do business with state and local governments, StateRAMP (State Risk and Authorization Management Program) has emerged as a critical compliance framework. Modeled after the well-established Federal Risk and Authorization Management Program (FedRAMP), StateRAMP aims to standardize and streamline security measures for cloud services at the state level, helping governments and providers alike reduce risk and enhance resilience against cyber threats.

“StateRAMP certification is more than just a compliance milestone—it’s a gateway to significant revenue opportunities for cloud service providers. By achieving this certification, CSPs position themselves to access a growing market of state and local government clients who demand secure, reliable solutions. It’s an investment that pays off in credibility, trust, and a competitive edge.”
— Josh Daymont, CEO of Securisea

As a StateRAMP-approved Third-Party Assessment Organization (3PAO), Securisea is dedicated to guiding CSPs through this rigorous but essential journey. Below, we break down what StateRAMP is, why it matters for CSPs, and how to navigate the certification process effectively.

What is StateRAMP?

Launched in 2020, StateRAMP is a nonprofit organization that sets standardized security criteria for cloud services used by state and local governments. Its purpose is to protect sensitive information and public resources by ensuring that cloud providers meet stringent cybersecurity requirements before their solutions are integrated into government systems. By aligning with StateRAMP standards, CSPs not only build trust but also open the door to more government contracts and partnerships.

Like its federal counterpart, FedRAMP, StateRAMP establishes a robust framework of controls and regular assessments, which provide transparency and assurance to public agencies. However, StateRAMP tailors its requirements specifically to state and local government needs, addressing unique challenges and security requirements at these levels.

Why is StateRAMP Important for Cloud Service Providers?

For CSPs interested in serving state and local governments, StateRAMP certification can be a game-changer. Here's why:

• Increased Trust and Credibility: Achieving StateRAMP certification signals that your organization meets high cybersecurity standards. State agencies are more likely to work with vendors they can trust to safeguard their data, and StateRAMP certification provides that reassurance.
• Market Access and Competitive Advantage: Many state governments are beginning to require StateRAMP certification for cloud service contracts. Having the certification opens doors to a broader market of government clients who need secure cloud solutions.
• Risk Reduction: Meeting StateRAMP requirements helps CSPs reduce vulnerabilities within their systems, minimizing the likelihood of cyber incidents that could damage their reputation and result in significant financial losses.
• Operational Efficiency and Consistency: By adhering to a recognized framework, CSPs can ensure that their internal security practices align with industry standards, leading to operational efficiencies and more streamlined processes.

Key Components of the StateRAMP Program

StateRAMP provides a structured pathway for CSPs to demonstrate security compliance. Here’s an overview of the process:

1. Establishing Baseline Controls: StateRAMP categorizes security requirements into different impact levels: Low, Moderate, and High, depending on the sensitivity of the data the cloud solution will handle. CSPs must implement security controls that align with the appropriate impact level for their services.
2. Third-Party Assessment: To ensure objective verification of compliance, CSPs work with a StateRAMP-approved Third-Party Assessment Organization (3PAO) like Securisea. The 3PAO conducts a comprehensive security assessment to confirm that the CSP’s cloud solution meets the necessary requirements.
3. Continuous Monitoring: StateRAMP isn't a one-time certification. It requires ongoing monitoring to maintain compliance and address any new vulnerabilities as they arise. CSPs must provide monthly, quarterly, and annual reports to ensure they’re meeting the required standards consistently.
4. StateRAMP Authorized Status: Upon successful assessment, CSPs earn a StateRAMP Authorized status, which indicates their solutions are approved for use by state and local governments. This status is publicly available on the StateRAMP Marketplace, making it easier for government agencies to identify compliant solutions.

The StateRAMP Certification Process: What to Expect

For CSPs preparing to undergo the StateRAMP process, here’s a high-level look at what to expect:

• Readiness Assessment: Conduct an internal evaluation to determine whether your organization is prepared to meet StateRAMP’s control requirements.
• Gap Analysis and Remediation: Work with your 3PAO to identify any gaps between your current security measures and StateRAMP requirements. This step often involves implementing or enhancing security controls to close identified gaps.
• Full Assessment and Documentation: Once ready, your 3PAO will perform a thorough assessment, documenting all compliance efforts to provide a complete record for StateRAMP authorization.
• Continuous Monitoring and Reporting: After achieving certification, CSPs must maintain compliance through regular monitoring and reporting, demonstrating that they’re consistently meeting StateRAMP standards.

Why Work with Securisea?

Navigating StateRAMP can feel overwhelming, but with the right guidance, it becomes a manageable process. At Securisea, we specialize in helping CSPs understand, prepare for, and succeed in the StateRAMP certification journey. As an experienced 3PAO, we bring a deep understanding of StateRAMP’s intricacies, offering tailored support to streamline the certification process and ensure long-term compliance.

From initial assessments and gap analysis to full certification and continuous monitoring, Securisea is here to be your partner in achieving and maintaining StateRAMP compliance. By securing this certification, you not only position your organization for growth in the government sector but also contribute to a stronger, more secure digital landscape for all.

If you’re ready to start your StateRAMP journey, reach out to Securisea. Together, we’ll navigate the path to certification, helping you unlock new opportunities with state and local governments while strengthening your organization’s security framework.

When it comes to federal compliance, two significant frameworks often come into play: FISMA (Federal Information Security Management Act) and FedRAMP (Federal Risk and Authorization Management Program). While both aim to protect federal information, they serve distinct purposes and apply to different types of organizations. Here’s how Securisea approaches these two frameworks, helping organizations navigate their unique requirements and ensuring compliance that aligns with your specific federal goals.

What Is FISMA?

The Federal Information Security Management Act (FISMA) is a U.S. federal law that requires all federal agencies, contractors, and other organizations that handle federal information to develop, document, and implement information security programs. Established in 2002 and later updated by the Federal Information Security Modernization Act, FISMA emphasizes continuous monitoring and reporting of cybersecurity risks to ensure that federal data remains protected across all information systems.

At Securisea, we guide organizations through FISMA compliance with a focus on building robust security programs that stand up to the rigorous standards expected by federal agencies. Whether you’re an agency or a contractor, we help align your security processes with the requirements set by NIST 800-53, FISMA’s primary control framework, ensuring that your systems are not only compliant but also resilient against today’s complex cyber threats.

What Is FedRAMP?

The Federal Risk and Authorization Management Program (FedRAMP), in contrast, is a government-wide program specifically designed to assess and authorize cloud service providers (CSPs) that work with federal agencies. Launched in 2011, FedRAMP standardizes the security assessment process for cloud products and services used by the federal government, ensuring that CSPs meet strict security requirements.

FedRAMP requirements build on NIST’s 800-53 guidelines, but they’re tailored specifically to cloud environments and focus on areas critical to cloud security, such as data segmentation and multi-tenant architecture. Securisea’s expertise in FedRAMP allows us to support cloud providers through this rigorous process, ensuring that they meet FedRAMP’s high standards and are equipped to serve federal clients securely and efficiently.

Key Differences Between FISMA and FedRAMP

Though both frameworks aim to secure federal data, FISMA and FedRAMP have distinct applications:

1. Applicability:some text
   • FISMA applies to federal agencies and contractors that manage or work with federal information systems. Essentially, any organization working with federal data outside of a cloud setting will likely fall under FISMA.
   • FedRAMP is specific to cloud service providers that store, process, or transmit federal data. If your organization provides cloud-based services to federal agencies, FedRAMP authorization is required.
2. Control Frameworks:some text
   • Both FISMA and FedRAMP use NIST 800-53 as their foundational control framework. However, FedRAMP introduces additional cloud-specific requirements that are not part of FISMA, ensuring cloud environments meet the unique security needs of federal agencies.
3. Assessment Process:some text
   • FISMA assessments are typically conducted by federal agencies or an authorized third-party provider. The compliance approach involves continuous monitoring, reporting, and regular audits.
   • FedRAMP requires a more standardized and formal authorization process, often involving a Third-Party Assessment Organization (3PAO), like Securisea, that conducts a comprehensive review to ensure the cloud service provider meets FedRAMP’s requirements. This can include an Agency Authorization process or a Joint Authorization Board (JAB) review.
4. Authorization Maintenance:some text
   • For FISMA, organizations must engage in continuous monitoring and regularly update their security documentation, reporting security posture and compliance status to federal agencies.
   • FedRAMP also requires continuous monitoring, with CSPs required to submit monthly reports and undergo annual assessments to maintain their FedRAMP Authorization.

How Securisea Can Help

Securisea offers specialized support for both FISMA and FedRAMP compliance, guiding organizations through the complexities of each framework. Here’s how we make the process simpler:

• FISMA Compliance: We help agencies and contractors develop and implement strong information security programs that meet FISMA requirements, from risk assessments and control implementation to continuous monitoring and reporting. Our team ensures you’re equipped to meet the demands of federal cybersecurity standards with a solution that aligns with your organization’s unique needs.
• FedRAMP Authorization: For cloud service providers, we offer end-to-end FedRAMP support, including readiness assessments, gap analysis, and full authorization packages. Our expertise in cloud security enables us to navigate FedRAMP’s complex requirements efficiently, positioning you for success in serving federal clients. As an authorized 3PAO, Securisea is qualified to assess and validate your compliance, ensuring you meet every standard needed for FedRAMP certification.

Choosing the Right Path Forward

FISMA and FedRAMP serve different, but equally important roles in federal compliance. Whether you’re an agency, contractor, or cloud provider, aligning with the correct framework is essential for protecting federal information and maintaining compliance. At Securisea, we provide expert guidance to help you understand which framework applies to your organization and offer tailored services to simplify compliance and enhance security posture.

By choosing Securisea, you gain a partner who not only understands the intricacies of FISMA and FedRAMP but also delivers a streamlined, supportive approach to compliance. Connect with us today to learn more about our comprehensive compliance services and take the next step toward secure, reliable federal partnerships.

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