How do independent third-party attestations, such as SOC 2 reports, contribute to an organization's ongoing assurance program for its vendors, rather than just initial screening?

Independent third-party attestations, such as SOC 2 reports, are formal examinations performed by an unbiased certified public accountant (CPA) firm to evaluate an organization's controls related to a specific subject matter. These attestations contribute to an organization's ongoing vendor assurance program by providing sustained, objective insights into a vendor's control environment, moving beyond the static nature of initial screening. Initial screening typically involves a one-time assessment of a vendor's stated security posture, policies, and initial control design, which is a snapshot and does not confirm consistent control performance over time.

A SOC 2 report, specifically, is a report on controls at a service organization relevant to security, availability, processing integrity, confidentiality, or privacy, based on the American Institute of Certified Public Accountants’ (AICPA) Trust Services Criteria. There are two types: a SOC 2 Type 1 report describes the vendor's system and the suitability of the design of its controls at a specific point in time. A SOC 2 Type 2 report, which is far more critical for ongoing assurance, describes the vendor's system, the suitability of the design of its controls, and most importantly, the *operating effectiveness* of those controls over a specified period, typically six to twelve months.

For ongoing assurance, the SOC 2 Type 2 report provides continuous validation. It confirms that the vendor's internal controls, which are safeguards implemented to mitigate risks, have been designed appropriately and have operated effectively and consistently throughout the entire reporting period. This periodic, independent verification allows the client organization to monitor the vendor's control environment over time without having to conduct its own resource-intensive audits repeatedly. By reviewing annual or biannual SOC 2 Type 2 reports, the client organization gains continuous visibility into the vendor's ability to maintain its security, availability, and other critical controls. If the report identifies control deficiencies, exceptions, or qualified opinions, it serves as an early warning system, prompting the client organization to engage with the vendor for remediation, re-evaluate risk, or trigger a more in-depth assessment. Conversely, a clean SOC 2 Type 2 report provides ongoing confidence that the vendor is upholding its commitments and managing its risks effectively, thereby reducing the client organization's overall third-party risk exposure and providing objective evidence of due diligence for its own compliance requirements.