Why Quality Matters for SOC Reports

Editor’s note: This article was originally published on February 25, 2025 and updated in April 2026 to reflect recent public reporting and renewed market attention around the risks that can arise when compliance automation outpaces independent validation.

The importance of SOC reports and the rise of ‘templatized’ solutions

As organizations continue to outsource more processes to third parties, companies have sought new ways to understand the controls in place at potential service providers. One of the most common ways for a company to understand the control environment of a potential service provider is to obtain a Service Organization Control (SOC)report.

SOC reports are essential for understanding the processes and controls in place at a service provider. Businesses rely on these reports to evaluate the effectiveness of processes and controls. The quality of a SOC report can significantly impact an organization's reputation, compliance posture, and customer trust. The popularity of SOC reports for evaluating a given service provider has led to pressure within the market to make SOC reports easier and less expensive to obtain. There are many software providers that have developed SaaS solutions intended to assist companies in preparing for a SOC examination.  However, in many cases, these tools have resulted in "templatized" system descriptions and controls which are difficult to test and cause client frustration with inaccurate evidence requests. This has created  quality concerns associated with these "quick turnaround" SOC reports, and complaints that they have become "check the box" exercises that provide little value in providing meaningful information about a service provider's processes and controls.

Issues with compliance automation

Recent allegations involving compliance automation are a reminder that speed should not come at the expense of independent validation.

Regardless of how any one case is resolved, the broader takeaway is clear: a SOC report is only as reliable as the quality of the controls, evidence and testing behind it.

Automation can support readiness and documentation collection, but it should not replace the strategy and judgment that make a SOC report meaningful.

Ethical connotations of strong SOC reporting

Recent AICPA guidance reinforces that business arrangements between auditors and SOC tool providers can create conflicts of interest, undue influence, and financial dependencies that may affect independence and professional judgment. When automation, standardized approaches, or vendor-driven timelines shape the engagement, testing can lose depth and conclusions may be less reliable. Ultimately, a SOC report’s value depends on independent judgment, sufficient evidence, and the rigor applied throughout the engagement.

Why SOC report quality matters even more now

Below are some primary reasons why quality matters in SOC reports:

1. Stakeholder confidence 

Clients, investors, and business partners rely on SOC reports to assess risk before engaging with a service provider. A well-prepared report instills confidence, demonstrating a commitment to security and operational excellence. 

2. Risk mitigation 

A thorough, high-quality SOC report helps organizations identify and address potential control weaknesses before they become security incidents. A poorly executed or inaccurate control test can leave critical risks unaddressed, exposing the business to cyber threats and operational failures. 

3. Competitive advantage 

In today's digital landscape, businesses seek partners with strong security and compliance frameworks. A high-quality SOC report can differentiate a company from competitors, making it a preferred choice for customers. 

The purpose of a SOC report is to provide user organizations with adequate information about a service provider’s processes and controls, helping them understand associated risks. For example, a data center’s SOC report (most likely a SOC 2®) should  offer enough detail to assess whether your systems and infrastructure will be secured and monitored. If the report  is not thorough or detailed enough to provide the needed assurance, then you will likely find a different data center for your systems.

Quality is important for both SOC 2® and SOC 1® reports, but it is especially critical for SOC 1® reports. These reports describe the processes and controls at service providers that process and report transactions that have an impact on a user organization's financial information. Financial statement auditors rely on SOC 1® reports to help them understand the processes and controls in place at third party providers, such as payroll providers. 

The financial statement auditors need assurance that controls over the calculation, processing, and reporting of payroll are designed effectively and operating consistently to ensure the accuracy and completeness of payroll recorded in the financial records. A high-quality SOC 1® report will clearly describe the payroll processes and controls and will provide adequate details of how the controls were tested.

If the report is missing certain controls, or the testing is not adequately rigorous to provide assurance, then the audit team must determine if additional procedures must be performed to gain the necessary assurance. That can be time-consuming and expensive.

How to evaluate the quality of a SOC report

Here are the key factors to consider when evaluating the quality of a SOC report:

Are the controls clear and concise?

• What we don’t want to see are lengthy paragraphs in place of controls

Is the test step simple and clear as to what the auditor looked at to validate operational effectiveness?

• What we don’t want to see is vague statements rather than control tests.

Does the report clearly identify subservice organization used by the company?

Invest in long-term success 

Quality is crucial when preparing SOC reports, as they serve as a foundation for trust, compliance, and risk management. Organizations should work with experienced auditors, ensure thorough testing of controls, and provide transparent documentation to maintain high standards. In an era where security breaches and compliance failures can be costly, a well-executed SOC report is an investment in long-term success.

Whether you are planning your first SOC report or enhancing an existing process, connect with UHY to discuss your readiness and reporting goals.