How to Read a SOC Report | Key Insights for Vendor Risk Management

Published on September 2, 2025 by Myles Wallace in SOC Reports, Technology

SOC reports are a vital tool in vendor risk management, but for many users, they can feel dense, technical, and even overwhelming. Unlike a simple pass/fail scorecard, a SOC report requires careful reading to extract the insights you need to make informed decisions about your third-party providers. So how do you read one?

This simple guide to understanding and using SOC reports effectively is designed to help.

Why do organizations ask for SOC reports?

Businesses often work with vendors who process sensitive data or perform critical functions – think credit card processing, medical billing, or even email hosting. As part of their vendor risk management programs to protect vital operations, these organizations request SOC reports to gain assurance over the vendor’s control environment; specifically, how they protect data, manage access, and ensure operational reliability.

Start with the scope and time period

When you review a SOC report, start by evaluating the scope of the report and the time period it covers, and confirm:

• The scope covers the exact services you’re using. Vendors may have multiple SOC reports for different services or locations, and not all may be relevant to your engagement.
• The time period is current. Outdated reports may not reflect recent changes in the vendor’s environment.

Also, identify the type of SOC report you’ve received:

• SOC 1 – This type of SOC report focuses on internal controls over financial reporting.
• SOC 2 – A SOC 2 report addresses security, availability, processing integrity, confidentiality, and/or privacy. Not all SOC 2 reports cover all five trust services categories, so it’s important to verify that the report covers the areas that matter most to your business.

Dig into Section 3: System Description

This describes the vendor’s system, including people, processes, infrastructure, software and data including:

• Data center locations or cloud hosting regions.
• Encryption methods and antivirus software.
• Logical access controls and authentication procedures.
• Key subservice providers (critical vendors your vendor relies on).

Understanding these elements will help you assess whether the vendor’s infrastructure and security align with your risk tolerance.

Review the controls and testing results

The core of a SOC report is the list of controls, the auditor’s testing procedures, and the results. Be sure to look for:

• Relevance – Does the control relate to the services you use?
• Results – Were the controls operating effectively during the testing period?
• Exceptions – Were there any failures or deviations in controls?

Not all exceptions are deal-breakers. Their significance depends on:

• The control’s importance to your operations.
• Whether the issue directly impacts data security or compliance requirements.
• The vendor’s remediation efforts.

For critical controls such as access management or data encryption, exceptions may warrant follow-up for remediation requests or even reconsidering the vendor relationship.

Use checklists for consistency

To make the SOC report review more efficient, many organizations use standardized checklists. These can include:

• Detailed forms for high-risk vendors handling sensitive or regulated data.  This could include evaluating controls that the report says are the responsibility of the reader (or “user organization”).
• Short-form summaries for lower-risk vendors where a quick review is sufficient.

A checklist ensures nothing is overlooked and helps maintain consistent documentation across multiple vendor reviews.

Putting the SOC report in play

A SOC report is much more than a compliance document – it’s a practical tool for:

• Assessing vendor security posture.
• Informing contract negotiations.
• Documenting due diligence for regulators or internal audits.

By approaching each report with a structured review process, you can make better-informed decisions, reduce third-party risk, and strengthen your overall vendor management program.

You might also like…

You might also be interested in our SOC Reporting FAQ, packed with answers to the questions our team of SOC reporting pros hear most often, or our SOC Reporting Toolkit, a rich collection of resources to help you make the most of SOC reporting. And while you can’t perform a SOC audit fully on your own (it must be conducted by an independent CPA), there are a lot of things you can do to streamline the process and even reduce costs and timing. Find out more in our DIY SOC Reporting video series.

Contact us

If you’re interested in a SOC reporting quote or would just like more insight, contact us for a free consultation with one of our leading SOC reporting pros. As always, we’re here to help.