Avoiding the Hidden Pitfalls of Selecting the Wrong SOC Audit Partner
April 13, 2020
The Increased Importance of Shopping for Value Over Price
A System and Organization Controls (SOC) audit is an independent, third-party assessment of a service organization’s commitment to service and trustworthiness. Essentially, for any organization that intends to outsource a part of its business (i.e., data center, payroll, etc.), it’s a way to vet and gain reasonable assurance that your outsourced service providers are operating within an appropriate and effective control environment.
For certain service organizations, such as data centers, loan servicers, payroll or medical claims processors, and Software as a Service (SaaS) providers, a SOC audit is frequently required by their customers, stakeholders, and/or business partners. And for any other organization with a business model based on providing a service to another organization, proof of SOC compliance is a way to gain a competitive advantage and evidence legitimacy.
As detailed in our eBook, there are several types of SOC reports available depending on the type and size of the organization; all of them provide value to not only the user entities but also the organization itself.
Whether your organization is asked to undergo a SOC assessment or you decide to achieve this level of compliance proactively, there are important expectations to hold a public accounting firm accountable to when seeking a business partner to guide you through this process. Like any business consulting need, it is essential to perform diligence when selecting a business partner to make this type of investment, which can seem daunting.
Most importantly, because timing is of the essence in any circumstance, you want a business partner who can help you navigate the process properly and efficiently the first time. Why? You want the business partner you invest in to be fully capable of serving you through several annual audit cycles.
Why is Value of Utmost Importance Over the Price?
Like any investment, whether personal or professional, we are inclined to select the most budget-friendly solution. However, more often than not, that proves to be the wrong strategic decision. As a firm in this space, SC&H Group’s SOC Audit Services team has had many conversations with organizations that selected the lower cost firm because when making a decision that does not significantly alter the bottom line – everyone wins. Right? Wrong.
So, maybe your organization is experiencing consequences due to selecting the lower cost SOC audit firm and let us be clear, there’s no need to be discouraged because there are ways to remedy this type of situation. But before considering your options, the time has come to do further diligence on your current audit firm. Consider asking the following questions if you are considering a change in your SOC auditor:
- Are you experiencing delays in report issuance?
- Have you set clear expectations and timelines for issuance based on stakeholders and customer feedback/requirements?
- Have you experienced turnover with your audit team impacting timing or ability to build efficiencies?
- Are you reconfirming controls each period to ensure appropriate coverage of criteria and changes/improvements to the control environment?
- Do you have an effective and secure mechanism in place for data transfer and accurate/timely project tracking?
- What procedures has your audit firm put into place to avoid surprises?
Any of these questions resonate? Or feel all too familiar? You’re not alone, and there’s a reason this list of questions exists.
Many companies find due to an immediate need to win new business, or a desire to gain a competitive advantage, they select a lower-cost business partner only to find they should have selected the partner who could provide the best value to their organization as a whole.
SC&H Group’s SOC Audit Services team has had numerous conversations with organizations that are not gaining the promised results or timeliness to completion to meet their immediate needs or expectations. And that is where we are able to step in to get the job completed efficiently, transparently, effectively, and, most importantly, timely.
No organization should feel stunted, or in a position in which they are not able to move their strategic needle forward due to a failed SOC audit experience. If your business finds themselves at a crossroads, and the need to complete your SOC audit is ever apparent, consider a consult with a member of our team.
Walking through the questions above has led to many successful partnerships, and we are here to figure out the most valuable scenario for your organization to ultimately fulfill your business needs with the right SOC audit firm.