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Auditing Basics: What is Scope?

What is Scope and How Does it Impact an Audit?

Knowing where your assets reside is critical for any organization. Why? Because knowing where your assets reside and which controls apply to them is the only way you can manage and secure them from a potential data breach or security incident. During the initial phases of a SOC 1 or SOC 2 audit, an auditor will walk you through defining the scope of your audit. But what exactly does that entail? The scope of your audit sets boundaries for the assessment. It requires organizations to identify the people, locations, policies and procedures, and technologies that interact with, or could otherwise impact, the security of the information being protected.

 

How Do You Define the Scope of a SOC 1 or SOC 2 Audit?

When an organization partners with their auditor to define the scope of their SOC 1 or SOC 2 audit, they’ll typically answer questions, such as:

  • Which locations are involved?
  • Do you have any third parties? What services do they provide?
  • How many business applications and technology platforms are involved?
  • Which systems are involved?
  • What people are responsible?
  • Which processes focus on internal control over financial reporting?

Can Your Scope be Too Broad or Too Narrow?

The scope of an audit can greatly impact the overall effectiveness of the audit. If the scope is too broad, an auditor could miss critical items during the assessment. If the scope is too narrow, an auditor might not be able to perform an accurate assessment or give an accurate opinion of an organization’s controls because some may have been left out. This is why partnering with an expert, senior-level Information Security Specialist, like those at KirkpatrickPrice, is so critical. If you want to get the most out of your investment in a SOC 1 or SOC 2 audit, effective scoping is key.

Video Transcription

One of the very first things that you will do as part of your audit is work with your auditor on the definition of scope. You’ll go through a scoping process with us where we identify the policies and procedures, the people, and the locations. For example, is there application development that’s in scope? Where are those developers located? Where do they do their work? What cloud applications are involved in this? What part of that is or isn’t in scope? What IT resources are in scope? Are there parts of the network that should be included or excluded from the audit? We’ll go through that and define it because it is a very important step, and we have to know what the boundaries of the system are so that we can collect evidence from the appropriate people, processes, and technologies. Contact us today and enjoy working with one of our expert Information Security Specialists who will guide you through the scoping process.

Understanding Your SOC 1 Report: What is Scope?

So What Is Scope, Anyway?

No matter what kind of data you’re protecting – financial information, cardholder data, ePHI – you need to understand where your assets reside and what controls are protecting them. This is why the scoping process is so important. If you don’t know where your data is, how do you plan to protect it?

What is scope? How do you determine an accurate definition of scope? The scope of an assessment identifies the people, processes, and technologies that interact with, or could otherwise impact, the security of the information to be protected. Scoping is the first step for any assessment and also one of the most important elements of an information security assessment because ignoring any of the relevant people, processes, or technologies could severely impact the quality and reliability of the entire assessment.

SOC 1 reports were primarily designed to report on the controls of service organizations that are relevant to their client’s financial statements. For a SOC 1 audit, the scoping process may look something like this:

  • Which locations are involved?
  • Do you have any third parties? What services do they provide?
  • How many business applications and technology platforms are involved?
  • Which systems are involved?
  • What people are responsible?
  • Which processes focus on internal control over financial reporting?

As you work with your auditor, you will determine a proper definition of scope. Scoping is critical to putting boundaries in place for collecting evidence. If you have questions about scoping, SOC 1 audits, or want help demonstrating to your clients your commitment to security and compliance, contact us today.

Video Transcript

One of the very first things you’ll work with in a SOC 1 audit is the definition of scope. As you work with your auditor, you will define what the proper scope is for the audit, such as what locations are involved, which services are in scope for the audit, which processes, which vendors are involved. Are there outsourced services from vendors that are writing code for you or providing IT services for you? The proper definition of scope is very critical in order to put those boundaries in place and understand what kind of evidence has to be collected after the fact. So, begin thinking about scope and how you would scope the audit so that you can discuss that with your SOC 1 auditor.