Most of us know by now how useful it is to review a vendor’s SOC report when doing third-party due diligence. But, what if your vendor doesn't have a SOC report? If a large corporation doesn’t have a SOC report, that may be considered a red flag, but many small organizations don’t have a SOC report due to the cost of obtaining them and the internal resources required to manage that type of project. So, what can you review instead?
How to Approach Reviewing SOC Report Alternatives
The first thing you want to ask yourself, when trying to determine what is best to review, is:
What type of inherent risk does that vendor introduce by you outsourcing the service?
This alone can help you narrow down your search for documentation. If availability is your biggest concern, then reviewing a vendor’s business continuity and disaster recovery program documents could give you just the insight you need.
Or, if you are more concerned with cybersecurity or privacy, you will want to review things like:
- Cybersecurity program
- Security testing
- Incident detection and response
- Vendor financials
- Business continuity plans
You also need to consider the availability of evidence. What do they have, and is it appropriate for the vendor size and service they’re offering? Not all vendors have the same level of documentation, nor should they be expected to, so it’s important to ensure you have appropriate expectations. That said, the vendors should have an appropriate amount of documentation for their size and the services they offer.
Some smaller vendors may have very little documentation, but they may have the ability to provide or complete a vendor risk assessment questionnaire. We create questionnaires for these types of scenarios depending on the areas of risk. Some vendors also use standard questionnaires such as a SIG from Shared Assessments or a CAIQ from the Cloud Security Alliance that can be helpful for due diligence.
Documentation to Avoid
Another area to be aware of is what not to take. Some vendors may want to provide a PCI-DSS AoC (Attestation of Compliance) or another attestation of a standard as evidence. These are great as part of a larger package, but generally should not be used on their own because they don’t usually provide narratives or control testing that really provides insight into their actual control environment.
Other documents that should not necessarily be accepted on their own are subservice SOC reports. Many vendors, especially smaller organizations, outsource key parts of their control environment to subservice organizations. You absolutely want to know this and you definitely want to review those fourth-party SOC reports as part of your due diligence, but not in lieu of documentation from your direct vendor.
Ultimately, when a vendor discloses that they don’t have a SOC report to review, it’s not the end of the world. The most important next step is evaluating what a reasonable expectation is of them. Based on their size, the service they provide and the risk they pose to your organization, there are other avenues to explore with your vendor to get the evidence you need to ensure a secure and viable relationship!
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