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ISAE 3000

Organizations increasingly outsource processes or data to service providers. Processes or storage that have no relation to financial processes are relevant for an ISAE 3000 (SOC 2 report). A SOC2-report is an internal control report that focuses on controls at a service provider relevant to security, availability, processing integrity, confidentiality, and privacy of an organization. An ISAE 3000 (SOC 2) report ensures that a service organization keeps data private and secure while processing or in storage, and that data is accessible at any time. 

By contrast, ISAE 3402 requires a service organization to define control objectives that are likely to be relevant to their customers’ Internal control over financial reporting (ICOFR). ICOFR is relevant for all organizations quoted on the NYSE which are subject to supervision by the Security and Exchange Commission (SEC).

The software licensing industry is revolutionized by Cloud Computing. Long installation processes on local servers have been replaced by instant available cloud services, but this also implies new security risks. The long installation procedures provided the organizations the opportunity to verify the reliability of the network and systems. This also provided more control over data. The major disadvantage of local installation was the time-consuming and costly set up and maintenance. Adding applications to your organization can be as fast as logging into an online platform.

 

Cloud Services

An important competitive advantage is created by the speed and cost control. Cloud hosting providers offer services at a fraction of the costs of self-installation on local servers. Flexible payments plans avoid large investments and provide new opportunities for new and existing business-lines. Flexibility and cost control also brings risks; are security, privacy and availability established as solid as you would expect or your supervisors and customers require? An ISAE 3000 (SOC 2) provides all answers to these questions and risks.

Trust Service Criteria

Trust Service Criteria
 

Trust Service Principles

SOC 2 reports issued under the ISAE 3000 standard are based on Trust Services Principles and Criteria. For security, availability, confidentiality, processing integrity, and privacy specific principles and criteria are defined. ISAE 3000 (SOC 2) reports are modular, implying that reports can cover one or more of the principles, depending on the needs and requirements of a services organization. The contents of an ISAE 3000 (SOC 2) and an ISAE 3402 (SOC 1)-report generally is identical, including risk management and control descriptions.

Benefits ISAE 3000

The increase of outsourcing information brings increased concerns for risks and security by your customers and their supervisors. Supervisory authorities in the financial services such as banks, insurance companies and asset managers require that control is excersised over outsourcing. An ISAE 3000 (SOC 2) report is based on all requirements and needs of all the stakeholders providing trust and the assurance that procedures are improved each audit period. This will position your organization as best in it's class. Generally the benefits are:

Outsourcing processing or hosting of data requires third party assurance on security, availability, confidentiality, privacy and processing integrity. ISAE 3000 audits are external confirmations that these criteria are met. 

Public Companies in the US or financial institutions in Europe are required to outsource to providers with a valid ISAE 3000/SOC 2 or ISAE 3402/SOC 1 in place to give investors assurance over controls that are performed by the outsourcing provider.

Our approach for implementing procedures is based on industries best practices for security, risk management and internal control. This combined with our in-depth knowledge in different industries with improve your internal control and procedures to the best in your industry. 

Audits performed by our group company Conclude Auditors will help you to continuously improve procedures and reduce the interruption of business operations by multiple user organization audits.

Content ISAE 3000 (SOC 2) report

The key is to successful outsourcing is selecting a service provider that is properly certified. An ISAE 3000 (SOC 2)-certification provides assurance on confidentiality, security and privacy of information. If you are dealing with sensitive customer data, for instance in the financial service industry or medical sector, security, confidentiality and privacy protection are key success factors. In an ISAE 3000 (SOC 2) report the risk control framework is described, including the related controls and procedures for monitoring the risk control framework. The ISAE 3000 if created by the IFAC to set compliance compliance standards and the Trust Service Criteria are created by the AICPA to provide a set of criteria for security, privacy, confidentiality and availability to keep pace with the rapid growth of cloud computing and business outsourcing challenges provided by the global economy.

ISAE 3000 type I

An ISAE 3000/SOC2 Type I report includes an opinion of an external auditor on the controls placed in operation at a specific moment in time. The external auditor examines whether the controls are suitably designed to provide reasonable assurance that the financial statement assertions are accomplished and whether the controls are in place. A Type I audit opinion is not sufficient for an user auditor to perform less audit procedures on outsourced services.

ISAE 3000 type II

In an ISAE 3000 Type II report, the external auditor reports on the suitability of the design and existence of controls and on the operating effectiveness of these controls in a predefined period. This implies that the external auditor performs a detailed examination of the internal control of the service organization and also examines whether all controls are operating effectively in accordance with the predefined processes and controls.

Risklane and ISAE 3000/SOC2

Risklane is established in 2004 and advices and supports a significant number of European datacenters, SaaS providers, managed service providers, property managers and institutional investors. Organizations will experience the benefits of our in depth experience, our pragmatic- and professional approach for implementing compliance standards. Risklane prepares all ISAE 3000 reports in compliance with industry specific best practices and generally accepted compliance frameworks, sush as COSO 2013 and COBiT 5.0. These are considered as the most advanced- and professional standards in the industry and will support your customers to trust your organization.