The SOC 1 Internal Controls Examination (formerly known as an SSAE 16 exam) is an in-depth examination of a service organization’s control objectives and control activities related to a user entity’s financial reporting and can only be performed by a CPA firm.
With a focus on the investment industry, Ashland Partners specializes in providing these types of examinations to investment advisors, as well as fund administrators and transfer agents. Our professionals have developed a unique perspective on the operational challenges and best practices of firms ranging in size from just under $1 billion to over $350 billion in assets under management.
Firms that undergo a SOC 1 examination will receive a specific report on the controls at a service organization. Similar to the SAS 70 reporting options, SOC 1 allows for a Type 1 or a Type 2 report. A Type 1 report opines as to the fair representation of a firm’s description of controls and whether or not they are suitably designed to achieve a firm’s control objectives as of a point in time. A Type 2 report goes a step further and opines on the effectiveness of the controls in place over a specific period of time.
The benefits of undergoing this type of examination are twofold. These types of reports are key for the independent auditors of a firm’s clients as it allows them to rely on the controls tested in the report without having to actually test those controls themselves in the firm’s office. This cuts down on the number of requests a firm receives. Additionally, many firms are seeing a request for a SOC 1 report come up as part of their clients’ ongoing due diligence process.
Over the years, these types of examinations have become an industry wide standard for firms striving for best practices and demonstrates to clients that a firm has adequate controls and safeguards in place when processing client accounts.
Please contact Jessica Parker at 541.864.1653 for more information or with any questions regarding the benefits of a SOC 1 examination.