When a critical vendor shares its latest System and Organization Controls (SOC) Report, it opens up an important window into a shared security ecosystem. It may be easy to file the report away and assume the vendor’s controls are covered. However, a “clean” opinion doesn’t automatically mean the vendor has no risk.
In our recent webinar, “What SOC Reports Reveal About Vendor Cyber Risk,” members from our SOC & HITRUST practice at Forvis Mazars walked through how to use SOC Reports more intentionally to support defensible vendor risk decisions.
How Can This Support My Approach if Issues Arise Later?
A SOC Report helps establish evidence before an incident or inquiry brings added scrutiny.
When something goes wrong, organizations need more than policy language. They need documentation that reflects how controls were designed, placed into operation, and observed over time. A SOC 2 Report can help demonstrate controls across security, availability, confidentiality, processing integrity, and privacy. When privacy is included, it can support reporting related to personal information, breach response expectations, retention, destruction, and higher-risk data categories such as child data or biometric identifiers.
The same approach applies across broader regulatory expectations. SOC 2 controls can be aligned to areas such as data transfer monitoring, financial services cybersecurity expectations, multifactor authentication, asset inventories, incident response, disaster recovery, and business continuity. Within international contexts, SOC Reporting also can help support organizations seeking alignment with both U.S. and EU-related expectations.
The value is not that a SOC Report prevents failure. Rather, it provides traceability. It shows what the organization understood, what it monitored, what was tested, and how responses were documented. This level of visibility can assist when insurance carriers, auditors, customers, leadership, and/or regulators ask how a control issue occurred or whether a known risk was addressed.
As the presenters noted, SOC Reporting “is not a check-the-box exercise.” It’s an input into a broader decision-making process.
What Could We Stop, Start, or Approach Differently Tomorrow?
SOC Reports often run hundreds of pages. The presenters suggested focusing on critical areas first, including:
- Section 1 (Opinion): “Clean” (which means unqualified) or qualified? If qualified, does the reason affect the services on which your organization relies?
- Section 3 (System Description): Does the report cover the specific services you use? This section also identifies subservice organizations and how those dependencies are monitored. Equally important: review the Complementary User Entity Controls (CUECs), which are the controls that the service organization expects you to operate. If you haven’t addressed them, a gap exists, regardless of the vendor’s report opinion.
- Section 4 (Testing Results): What did the auditor test, and were exceptions identified? Exceptions relevant to your processes deserve follow-up.
- Section 5 (Additional Information): Unaudited, but may include management’s comments on exceptions and regulatory mappings.
A common oversight was flagged during the webinar—some vendors issue multiple SOC Reports covering different product lines. Receiving a report does not automatically mean it covers the services you use.
To help strengthen risk management, consider your approach to the following:
- Data mapping and asset inventory: Know what data you have, where it lives, and how it moves before trying to protect it. Then tighten identity and access controls. Access remains a leading source of breaches, and controls such as multifactor authentication should be clearly documented and periodically evaluated.
- Incident response: Speed and structure carry more weight now, especially when reporting timelines apply. Response plans should be regularly exercised and resourced, not just documented.
- Third-party governance: Regulators increasingly treat third-party risk as first-party exposure. Move beyond point-in-time due diligence toward ongoing monitoring, risk rating, and shared ownership across departments.
- AI governance: Even foundational policies can help organizations begin addressing AI-related risk. Pair these with practical, evidence-based training for employees, contractors, and anyone with system access.
How Can This Help Support Efforts to Explain Decisions to Audit, Leadership, &/or Regulators?
SOC Reports offer a consistent evidence base which supports clearer communication of risk decisions.
When reviewing a SOC Report, start with the scope. Confirm that the report addresses the services your organization uses. Then review the opinion. If it’s qualified, understand the underlying reason and whether it affects your organization. From there, assess subservice organizations, evaluate CUECs against your own control environment, and document conclusions. This process creates a defensible narrative: here is the vendor risk, here is the control, here is the test result, here is our responsibility, and here is our follow-up.
Organizations that build this discipline into their vendor governance are better positioned when the next question comes from audit, leadership, or a regulator.
Best Practices to Consider
- Verify scope alignment on each SOC Report. Confirm the scope covers the services your vendor provides to you.
- Review CUECs and assess whether your organization meets its responsibilities. Document gaps and assign ownership.
- Prioritize exceptions that may affect your data or operations.
- Identify subservice organizations. If a critical dependency is carved out of the report, determine what additional assurance you may need.
- Support efforts to align review responsibilities across functions beyond IT.
- Document your review process and conclusions.
How Forvis Mazars Can Help
Navigating the nuances of SOC 1, SOC 2, and subservice vendor mapping can place a heavy burden on internal compliance and audit teams, especially when balancing vendor fatigue against rapid digital transformation.
Whether you need to build a defensible vendor tiering framework, map complex CUECs, or delve deeper into your fourth-party risk posture, our SOC & HITRUST professionals are here to help support operational security.
Ready to elevate your vendor risk management program? Reach out to one of our professionals.