Compliance for Managed Service Providers

Managed service providers have become a popular option for companies in order to outsource their day-to-day IT management responsibilities as a strategic way to improve operations. The increased outsourcing of IT operations has escalated the need for managed service providers to obtain a third-party assurance over the controls for security, privacy and regulatory compliance.

Today companies are outsourcing everything from production support to lifecycle build/maintenance activities to managed service providers. These activities are relevant to internal controls over the financial reporting of the managed service provider’s customers and should be examined under the SSAE 18 standard for SOC 1®. ‘Services that are relevant to internal controls over financial reporting’ can range from providing access controls over financial data to recording or manipulating financial data for the user organization.

Managed Service Provider’s SOC 1® attestation involves the following critical areas:

  1. Control Environment: the organizational level controls also known as “tone at the top” which consists of management’s oversight and internal operational level controls.
  2. Physical Security: the protection of information systems as it relates to third party data.
  3. Environmental Security: the protection of information systems and data from environmental threats.
  4. Data backups: the availability and protection of third parties’ data.
  5. System Availability: the availability of information systems to user organizations.
  6. Application Change Control: the processing and procedures used to ensure that systems function per user requirements.
  7. Information Security: the logical protection of data from unauthorized system access.
  8. Data Communication: the data maintains its integrity and security as it is transmitted between third parties and the service organization.

The scope of the SOC 1® attestation is determined by the managed service provider. Accordingly, a well scoped attestation can clearly demonstrate your organization’s quality of service and ensure that sufficient information is provided to your user organization to communicate your stringent controls over physical security, environmental security, authorized access and continuous availability of services.

SOC 1 Compliance Process

We tailor every attestation engagement to our client’s requirements. However, we have a fundamental four phase process that normally meets our clients’ needs and creates an efficient, unobtrusive attestation that enables you to focus on your business while we focus on your compliance.

<h2 style="display:inline;">Scope</h2> (Phase 1): Not every SOC 1<sup>®</sup> attestation has the same requirements. Each company can vary depending on the type of services they perform for their customers. We have years of experience working with just about every industry and work with our clients to ensure that we cover the appropriate scope to ensure your customers’ needs are satisfied. While the scoping phase of our attestation is normally covered during our initial quoting process, we offer a formal meeting with our clients to ensure we have a mutual understanding of the attestation goals.
<p> <h2 style="display:inline;">Plan</h2> (Phase 2): We offer two options for the planning phase of your audit:</p><!-- [et_pb_line_break_holder] --><ol><!-- [et_pb_line_break_holder] --> <li>We provide our in-house developed questionnaires and request list that are based on industry leading compliance frameworks such as CobiT, ISO 27000, PCI and HIPAA. Customers benefit from this approach by getting to work at their own pace with just a deadline in mind.</li><!-- [et_pb_line_break_holder] --> <li>The other option is an onsite visit to perform walkthroughs of the relevant service offerings. We then customize our attestation plan and deliver a detailed document request list to prepare our clients for phase three (fieldwork).</li><!-- [et_pb_line_break_holder] --> </ol>
<p> <h2 style="display:inline;">Fieldwork</h2> (Phase 3): Our service auditors have a minimum of five years of experience with the Big 4 global CPA firms, large consulting firms and smaller boutique firms that specialize in SOC 1<sup>®</sup> attestations. Due to this, we are efficient and understand what is required for each attestation.</p>
<h2 style="display:inline;">Report & Market</h2> (Phase 4): Your SOC 1<sup>®</sup> service auditor’s report is essentially the product for which you pay. We provide well defined and quality written reports that focus on providing your customers with everything they need from a third-party assurance perspective. We take pride in delivering professional quality reports in a timely manner; we stand behind everything we issue. Publicizing or marketing your service auditor’s report is the opportunity for your attestation to pay for itself. A major benefit from completing the SOC 1<sup>®</sup> attestation is the tangible return on investment that is created from having your company examined under the SSAE 18 standard for SOC 1<sup>®</sup>. We provide customized press release information and a SOC for Service Organizations logo to place on your web site, all included in our fixed fee pricing.

Project Timeline: Four Phase Attestation

For More Information Speak to a Service Auditor at Roosa CPA, LLC (877) 410-8516

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