A SOC 1 report is an independent assessment that evaluates the design and operational effectiveness of internal controls relevant to a client’s financial reporting. It is performed under the AICPA’s SSAE 18 standard and is highly relevant for service providers that support financial operations, such as:

• Payroll processors
• Investment managers
• Fund administrators
• Financial technology (FinTech) providers
• Data hosting or back-office support services

There are two types of SOC 1 reports:

• Type I: Assesses the design of controls at a specific point in time
• Type II: Assesses both design and operating effectiveness over a defined review period