SOC Communication & Stakeholder Relations 3 — Questions and Answers
Question 1: When communicating SOC audit results to the audit committee, what is the service auditor's PRIMARY responsibility?
- Recommend specific control improvements for implementation
- Report on the fairness of management's description and effectiveness of controls (Correct answer)
- Certify that no data breaches occurred during the period
- Guarantee that the service organization will pass all future audits
Correct answer: Report on the fairness of management's description and effectiveness of controls
The service auditor's primary role is to provide an independent opinion on whether management's description is fairly presented and controls are suitably designed and operating effectively.
Question 2: A service organization uses a subservice organization for data hosting. Under the carve-out method, how are the subservice organization's controls communicated to report users?
- They are fully tested and included in the SOC report
- They are excluded; the report describes what the subservice organization does but does not test its controls (Correct answer)
- They are tested but not mentioned in the report
- They are replaced by complementary subservice organization controls only
Correct answer: They are excluded; the report describes what the subservice organization does but does not test its controls
Under the carve-out method, the subservice organization's controls are excluded from the scope of testing, though its nature and the controls assumed to exist are described.
Question 3: Which Trust Services Criteria category directly addresses the requirement to communicate system availability commitments to stakeholders?
- Security (CC6)
- Availability (A1) (Correct answer)
- Confidentiality (C1)
- Processing Integrity (PI1)
Correct answer: Availability (A1)
The Availability criteria (A1) require the service organization to communicate its availability commitments and related information to authorized users.
Question 4: A user entity's external auditor requests a copy of the service organization's SOC 1 Type II report. The service organization refuses. What is the likely consequence?
- The user entity's audit is automatically qualified
- The user entity's auditor may be unable to rely on the service organization's controls and must perform alternative procedures (Correct answer)
- The user entity must switch to a different service organization
- The AICPA will revoke the service organization's right to issue future SOC reports
Correct answer: The user entity's auditor may be unable to rely on the service organization's controls and must perform alternative procedures
If a SOC 1 report is withheld, the user entity's auditor cannot rely on it and must use alternative procedures to obtain assurance over the relevant financial reporting controls.
Question 5: Management's assertion in a SOC 2 report serves which primary communication purpose?
- It replaces the need for an independent auditor's opinion
- It formally states management's claim about the description's fairness and control effectiveness (Correct answer)
- It lists all incidents that occurred during the examination period
- It certifies that the organization meets all applicable regulatory requirements
Correct answer: It formally states management's claim about the description's fairness and control effectiveness
Management's assertion is a written statement accepting responsibility for the system description and asserting that controls were suitably designed and operating effectively.
Question 6: Under SOC 2, which scenario would most likely require an emphasis-of-matter paragraph in the auditor's report?
- The report covers a standard 12-month period
- A significant change in the service organization's system occurred during the examination period (Correct answer)
- All controls operated effectively throughout the period
- The report uses the inclusive method for a subservice organization
Correct answer: A significant change in the service organization's system occurred during the examination period
Significant system changes during the examination period are typically highlighted in an emphasis-of-matter paragraph to alert report users to the changed circumstances.
Question 7: A SOC 2 report's distribution list is restricted to which parties?
- Any member of the general public upon request
- Existing user entities, prospective user entities with a signed NDA, and their auditors (Correct answer)
- Only the service organization's internal management team
- Exclusively the AICPA and relevant regulatory authorities
Correct answer: Existing user entities, prospective user entities with a signed NDA, and their auditors
SOC 2 reports are restricted-use documents intended for current user entities, prospective customers (often under NDA), and their independent auditors.
SOC Communication & Stakeholder Relations 3
When communicating SOC audit results to the audit committee, what is the service auditor's PRIMARY responsibility?