Technology and software companies often approach SOC Reports from two very different positions at the same time. On one side, they produce SOC Reports to satisfy customer due diligence and build market trust. On the other, they consume SOC Reports from infrastructure providers, cloud platforms, analytics tools, payroll vendors, managed services firms, and other third parties that sit inside their own operating stack.
That dual role makes vendor risk management nuanced and highly applicable. During a recent webinar on “What SOC Reports Reveal About Vendor Cyber Risk,” a relevant message was shared that accountability for cyber risk does not transfer when services are outsourced. Even highly capable software organizations remain accountable for decisions tied to the vendors, platforms, and subservice organizations on which they rely.
That is why it’s imperative for technology and software companies, especially software as a service (SaaS) organizations, to move away from treating SOC Reports as static compliance deliverables. Rather, SOC Reports should be viewed as part of a broader governance process that supports sensible prioritization, defensible decision making, and post-incident explainability.
For technology and software leaders, that framing is useful because modern environments are increasingly layered, integrated, outsourced, and sometimes globally distributed. In that setting, the report itself is only part of the story. The more important question is whether the organization can explain how it evaluated the vendor relationship in context.
Below is a deeper exploration into how tech companies can use SOC Reports to help them manage vendor risk.
Why Are SOC Reports Important for Software & Technology Companies?
American Institute of CPAs (AICPA) resources describe SOC Reporting as a tool that can provide users with information needed to assess and address risks associated with outsourced services. That’s relevant across industries, but the stakes can be particularly high for technology and software organizations because they often inherit risk from many layers of providers.
For example, a company may contract with one service provider, but material dependencies can sit further down the chain, often outside the view of business stakeholders unless those relationships are surfaced through reporting, governance, and/or vendor diligence.
With so much at stake, subservice organization exposure is one of the highest-value parts of a SOC Report. This notion is especially relevant for software companies utilizing cloud hosting, identity services, observability tooling, payment services, customer engagement platforms, and/or embedded artificial intelligence (AI) capabilities.
A SOC Report can help reveal not only whether controls were examined, but also whether meaningful service dependencies exist outside the vendor’s direct control, which matters for resiliency, incident response, customer commitments, and contractual risk.
What Should Software Companies Look for First Within a SOC Report?
A prioritization framework is helpful when approaching SOC Reports, since each report consists of several sections. Tech organizations can focus on scope, exceptions, subservice organizations, Complementary User Entity Controls (CUECs), report timing, and the existence of a proven vendor-management program. This guidance is practical for engineering, security, compliance, and product teams that cannot afford to spend equal time on every section.
To start, tech teams can begin by unpacking scope. Does the report cover the environments, systems, geographies, and services your company actually uses? Although this is a simple question, it’s important for technology organizations since a service provider may issue multiple reports, and some reports may cover only certain applications or certain hosting environments.
A best practice is to align the report to the outsourced service and confirm whether the provider has taken an inclusive or carved-out approach to subservice organizations. For software companies with layered environments, that distinction can materially affect the usefulness of the report.
Then, look at CUECs and user responsibilities. If a provider assumes your company is performing specific controls, those assumptions should not remain theoretical. Controls may involve access management, secure integration practices, logging, encryption-related behaviors, and/or internal monitoring. The report can only support your governance posture if the conditions that underpin it exist within your own environment.
How Does AI Governance Affect Vendor Risk for Software Companies?
AI is seemingly everywhere, and with it comes widespread AI governance immaturity.1 AI is a rising source of uncertainty within a control environment, and organizations lacking AI governance or proper access controls may be more exposed to AI-related incidents.
However, the NIST AI Risk Management Framework continues to position trustworthiness, transparency, and lifecycle governance as core elements of AI risk management.
For software companies, that means vendor review cannot stop at traditional hosting and security questions. If a provider is embedding AI, using model-driven workflows, and/or enabling generative features that affect customer data, outputs, and/or operational decisions, then the buyer may need a clearer view into governance, transparency, and accountability practices.
Further, AI governance insights from Forvis Mazars similarly stress cross-functional governance, documentation, risk oversight, transparency, and controls across the AI lifecycle. While a SOC Report may not answer every AI question directly, it can help surface the maturity of the provider’s control environment and the areas where follow-up may be warranted.
Why Does Cross-Functional Ownership Matter During Software Vendor Reviews?
Vendor risk often touches teams that do not always review vendors together. As shared during the webinar, think of this as a “team sport.” Security team members may focus on control exceptions and architecture. Legal team members may focus on liability, service commitments, and privacy terms. Procurement team members may focus on commercial obligations. Product and engineering team members may focus on integrations, dependencies, and uptime. Compliance professionals may focus on customer commitments and audit expectations. Combined, stronger decisions can be made by joining these informed perspectives as opposed to relying on one function to review the report alone.
That operating-model emphasis is also useful from a go-to-market perspective. Software companies spend significant time producing trust artifacts for customers. Yet mature buyers increasingly want more than the artifact itself. They want to understand how the company governs vendors, how it monitors dependencies, how it handles incidents, and how it explains control ownership across the stack. In that sense, good vendor governance is not only a risk activity. It’s also part of commercial credibility.
A Snapshot of a More Defensible Software Vendor Review Process
A more defensible process starts by documenting how the company decided the vendor relationship was acceptable for the intended use case, which means capturing scope alignment, evaluating exceptions, understanding subservice organizations, confirming internal responsibilities tied to CUECs, and recording any compensating controls or follow-up questions.
The value of this work may be most visible after an incident, when leaders, auditors, customers, and regulators ask why the vendor was approved and what the company knew at the time.
Timing also matters. In general, the most recent report should be requested and reviewed promptly, rather than being filed away and revisited much later. In fast-moving software environments, that cadence can be important since architectures, dependencies, and service offerings can change quickly.
Next Steps & How Forvis Mazars Can Help
Tech companies should treat vendor SOC Reports as a governance input, which supports documented decision making, not as a finish line for satisfying file requirements. When approaching SOC Reports, prioritize what matters most to your organization. Focus on scope, exceptions, subservice organizations, CUECs, and timing. When reviewing the report, extend it beyond direct vendors. Ask where critical dependencies sit within the provider’s own ecosystem.
Then, bring AI into third-party governance. Where AI-enabled services are involved, look for transparency, governance, and risk-management signals, then follow up where visibility is limited.
Lastly, use a cross-functional process to complete the vendor risk assessment (since security, legal, procurement, product, engineering, and compliance each see different parts of risk). Bring these entities together for a thorough view.
For software and technology companies, the next step in SOC maturity is not producing or collecting more reports. It’s using the reports to support governance-backed decisions across a complex vendor ecosystem. That’s how SOC Reporting helps support a more resilient operating model.
For more information on using SOC Reports for vendor risk management and additional SOC & HITRUST services, please reach out to a professional at Forvis Mazars.
- 1“Security Risk Assessment Tool,” healthit.gov, 2026.