SOC 1 Reports Help to Ensure Regulatory

An accomplished legal executive based in Minnetonka, Minnesota, Jamie Hurewitz leverages nearly two decades of legal experience in the technology field to serve as head of legal at Mattermost. Jamie Hurewitz has extensive expertise guiding businesses through mergers and acquisitions, as well as overseeing all aspects of compliance.

Service Organization Controls (SOC) reports are a compliance mechanism that enable businesses to prove their service delivery and control competence to customers. Among these reports, the SOC 1 is required for certain B2B companies that function as service providers. Examples of these businesses include data centers, software-as-a-service providers, and payroll processing businesses.

SOC 1 is crucial because it helps a business ascertain as well as prove that the financial data of its clients is protected. It also supports the internal control over financial reporting process for the business. An SOC 1 report is prepared on behalf of a company by a third party, which must be a certified public accountant. The report is then scrutinized by a financial statement auditor when evaluating the business for compliance with certain regulations, like the Sarbanes-Oxley Act, which mandates penalties for fraudulent financial reporting.