Get SOC 1 Certified
If your service impacts a customer’s financial reporting, SOC 1 is often the report they ask for. It gives user entities and their auditors assurance over controls relevant to Internal Control over Financial Reporting (ICFR) under SSAE 18 (AT‑C 320).
Neutral Partners helps you scope the right system description, design and document controls that auditors can test, and build evidence that holds up during the examination. The goal is a clean SOC 1 report that shortens customer reviews and supports renewals.
At a Glance
- Best for: service organizations whose services affect customer financial reporting
- Report types: Type 1 (design at a point in time) and Type 2 (design and operating effectiveness over a period)
- Core deliverables: control objectives, control descriptions, system description, evidence library, and readiness testing
- Common failure point: unclear scope and missing operational proof for controls
Start with scope and control objective clarity.
Book a Discovery SessionWhat Is SOC 1
SOC 1 is an examination of controls at a service organization that are likely to be relevant to user entities’ internal control over financial reporting. Customers rely on SOC 1 reports to understand how your controls support their financial statement integrity and to reduce duplicative audits.
SOC 1 is not a marketing badge. It is an auditor’s report that must be precise about scope, controls, and evidence.
SOC 1 Type 1 vs Type 2
- Type 1: reports on the design of controls at a specific point in time. It answers “are controls designed appropriately today?”
- Type 2: reports on both design and operating effectiveness over a defined period. It answers “did controls operate effectively over the period?”
Many customers prefer Type 2 because it provides operational assurance, but Type 1 can be a useful starting point when you are building maturity or when a customer needs initial assurance quickly.
Who Needs SOC 1
SOC 1 applies when your service can affect customer financial reporting outcomes.
Common SOC 1 candidates include:
- Payroll and benefits platforms
- Payment processors and payment related service providers
- Loan servicing and financial operations outsourcing
- Billing platforms and revenue recognition tools
- Data processing services used in financial close
- SaaS platforms with customer configurable financial reporting logic
A quick test: if your customer’s external auditor asks how your controls support their ICFR, SOC 1 is likely in play.
What SOC 1 Covers
SOC 1 focuses on control objectives and controls relevant to financial reporting. Scope depends on your service and customer usage.
Common control themes include:
- Access control: user provisioning, privileged access, and access reviews for systems that impact financial data
- Change management: approvals, testing, and release controls for systems that process financial transactions
- IT operations: backups, job processing, incident handling, and monitoring related to financial systems
- Data processing integrity: completeness and accuracy controls for transaction processing
- Logical security and segregation of duties: controls that prevent unauthorized changes and fraudulent activity
- Subservice organizations: how third‑party services are used and how controls are managed
SOC 1 reports often include Complementary User Entity Controls (CUECs). These are controls your customer must operate for the overall control objective to be achieved. Clear CUECs reduce misunderstandings during customer audits.
Evidence Auditors Expect
SOC 1 exams rely on evidence. Evidence must be consistent, dated, and tied to the control objective.
Common evidence includes:
- System description: boundaries, services provided, relevant applications, and supporting infrastructure
- Control narratives: what the control is, who performs it, how often, and what evidence exists
- Access evidence: user access lists, approvals, access reviews, and privileged access controls
- Change evidence: change tickets, approvals, testing results, and release documentation
- Operations evidence: backup logs, job schedules, incident tickets, monitoring records
- Financial processing evidence: reconciliations, exception reports, and processing logs where applicable
- Vendor evidence: contracts, SOC reports from subservice providers, and monitoring routines
Type 2 exams require evidence across the reporting period, so you need a cadence that collects proof continuously.
SOC 1 Roadmap
Confirm scope and reporting boundaries
- identify the services and processes that impact customer financial reporting
- define the system boundary and relevant applications
- document subservice organizations and the method of inclusion (carve‑out or inclusive)
Define control objectives and controls
- define control objectives relevant to ICFR
- document controls that support each objective
- identify CUECs and ensure they are accurate and clear
Run readiness testing
- test control design and operational execution
- identify missing evidence, unclear narratives, and control gaps
- remediate gaps before the formal exam
Prepare for the exam
- build an evidence library aligned to each control
- define owners and evidence collection routines
- coordinate timelines with the service auditor
Complete the SOC 1 Type 1 or Type 2 examination
- respond to auditor questions with clear evidence
- address exceptions quickly with remediation and documentation
- finalize report language and management assertions
Sustain controls year‑round
- maintain evidence cadence for key controls
- keep system description current as the product changes
- update CUECs and vendor dependencies as needed
SOC 1 success depends on scope and evidence discipline.
We will confirm your scope, define control objectives, and build the evidence plan that makes the exam predictable.
Schedule a Discovery SessionCommon SOC 1 Gaps
- Scope mismatch: the system description does not match what customers use
- Weak CUECs: missing or unclear complementary controls create customer audit friction
- Change management drift: releases happen without consistent approvals or testing evidence
- Access review gaps: access is controlled but periodic reviews are not evidenced
- Inconsistent operations evidence: backups and monitoring exist but records are incomplete
- Vendor dependency confusion: subservice provider controls are not documented and monitored
How Neutral Partners Helps
We help you build a SOC 1 program that auditors can test and customers can trust.
What we deliver
- SOC 1 readiness assessment: scope validation, control design review, and evidence evaluation
- Control documentation: control objectives, control narratives, and system description support
- Evidence mapping: traceability from controls to artifacts across the reporting period
- Exam support: request tracking, follow‑up triage, and remediation validation
- Sustainment: a calendar and operating model to keep evidence current
Proof matters. Since 2017, we have maintained a 100% audit success rate across more than 700 successful audits and assessments. We keep that record by building evidence that is easy for auditors to validate.
SOC 1 FAQs
How do we know if we need SOC 1 or SOC 2?
SOC 1 is for controls relevant to customer financial reporting. SOC 2 focuses on trust services criteria such as security, availability, confidentiality, processing integrity, and privacy. Many organizations need both. The deciding factor is what customers and their auditors require.
Should we start with Type 1 or Type 2?
Type 1 is faster and can help establish confidence. Type 2 provides stronger assurance but requires an operating period. Many teams do Type 1 first, then move to Type 2 once controls operate consistently.
What is the reporting period for Type 2?
Reporting periods vary, but common periods range from three to twelve months. The key is building an evidence cadence that covers the entire period.
How do subservice organizations affect SOC 1?
If you rely on third parties (hosting, payment processing, support platforms), your report must address them. You will also need to decide whether their controls are included (inclusive) or excluded (carve‑out) and documented as complementary controls.
What is the biggest SOC 1 risk?
Unclear scope and inconsistent evidence. SOC 1 exams are precise. If your narratives do not match evidence, auditors will report exceptions.
Key Resources
- AICPA SOC 1 overview
- AICPA guide for SOC 1 under AT‑C 320
- AICPA SSAEs currently effective (codified)
Useful Resources
- [Internal] SOC 1 scope worksheet
- [Internal] Control objectives and evidence map template
- [Internal] Type 2 evidence calendar
Make SOC 1 a Growth Lever
A clean SOC 1 report reduces customer audit friction and speeds renewals. We will help you build a program that auditors can test efficiently and customers can rely on.
Start with a short working session. We will map your scope, your control objectives, and the next three moves.