Have you ever invited a consultancy firm to perform a SOC 1 (f. SSAE 16) audit for your firm?
They should have begun by asking you the control objectives that you want in the scope of their examination. Most entrepreneurs will start by asking the experts what they mean by control objectives. I also came across this question when I wanted someone to write my paper.
This article will help you to understand the meaning of control objectives and how to draft and identify them in your next SOC 1 report. The situation is similar to anyone who wants to buy college papers online because you have to follow specific guidelines to get the required results.
What are Control Objectives
The term control objective has several definitions. For instance, control objectives provide a precise target against which you can use to evaluate the effectiveness of these controls. Another school of thought defines control objectives as the purposes or aims of specified controls at the organizational service. The primary role of control objectives is to address risks that controls are designed to mitigate. The last group of scholars define control objectives as a set of controls that are in a service organization to address risks to the internal control of user over financial reporting.
Identifying the Most Appropriate Control Objectives for Your Organization
The control objectives that are in a SOC 1 report help the entity auditors of the user to determine how the organizational controls of the service influence the financial statement assertions of the user entity. Therefore, as you determine the control objectives to include in your report description, the management of the service organization has to choose control objectives that relate to the kind of assertions that are common in several user financial statement entities.
The service organization should individually tailor its control objectives to the service that it provides. Besides, the service corporation should endeavor to have a full set of control objectives within the SOC 1 scope engagement. Thus, control objectives have to address all the main aspects that user auditors find to be relevant.
Companies that provide different services like data center service providers and SaaS (software as a service) may not have similar control objectives in their individual reports. However, they may have some control objectives in common such as physical security. Companies that provide the same type of services may not have similar control objectives, but they may not be necessarily the same.
Are you struggling to identify your control objectives or are not sure if you have the right ones? Just request the management of a user organization or the service organization to make a list of the critical processing activities that the user organization provides. This activity should yield the correct areas that you need to form control objectives around quickly. The most important thing is to make sure that the control objectives relate to the things that the service provider in question performs.
Relationship Between Controls and Control Objectives
Most people don’t know how controls relate to control objectives. Control objectives have to align with the services that the entity offers to the users and the risks that are associated with the financial statement assertions of those user entities. Controls refer to the activities that the organization undertakes to achieve control objectives to mitigate the user entities’ financial statement assertions risks. Every control activity has to relate to the control objective in a specific manner. Typically, every control objective has several controls that are connected to it.
Examples of Controls and Control Objectives
An example can show you better how controls and control objectives should correlate. Let me share with you an example of control activities and control objectives from an actual report. This information will assist you to understand how they should correlate and align to each other.
Control Objective: Controls offer a reasonable assurance that logical production application programs access and date files are restricted to the programs and personnel that have the appropriate authority.
Control Activity: The appropriate use police applies to all the current and future employees and consultants, vendors and temporary staff, and all new hires that need a password access.
Analysis: The control doesn’t explicitly relate to the main objective of limiting logical access. Even though the policy that is stipulated in the control may specify the control activities that limit logical access, the policy itself doesn’t control logical access. Some of the logical controls that can limit logical access include; authorization in the process of providing access, deleting access for all employees or contractors who have been terminated, password settings or periodic access reviews. The most important thing is to make sure that the align with the control objectives. You can always employ consultants to help you in developing control objectives just in case you don’t know where to begin from.
Just like you may require dissertation writing help, business consultants can also help you to craft the best control objectives for your entity. These experts will make sure that the control objectives that you choose are appropriate for your type of business.