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What to Know About SSAE 18 for Your Vendor Management

3 min read
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We had SAS 70, then SSAE 16... now we have the SSAE 18. SSAE 18 is a little different, so we’ve outlined some key points for you below to assist with your understanding.

Key Points to Know About SSAE 18 First

Before we dive into what SSAE 18 is all about, it's important to know a few points to base your understanding.

  • As of 2017, SOC 1 and SSAE 16 reports are no longer synonymous. SOC 1s are only SOC 1s.
  • The SSAE 18 does not directly replace the SSAE 16.The SSAE 18 is a simplified standard covering many other standards, SSAE 16 is just one. However, with the introduction of the SSAE 18, it caused the SSAE 16 to be retired, as 16 is covered within 18.
  • The SSAE 18 does not affect SOC 2 or 3s

What Is the SSAE 18?

The SSAE 18 is the guideline that dictates and sets the standard of all SOC reporting. It also requires a new creation and mandatory inclusion of Complementary Subservice Organization Controls, when applicable. This provides additional clarity of how your vendor is addressing their own vendor management obligations. Therefore, your vendors who use vendors of their own, aka your fourth parties, now must identify functions and controls that proves your fourth parties are performing.

The purpose for the creation of the SSAE 18 was to clarify the auditing standards and to reduce duplication within similar standards covering Examinations, Reviews and Agreed-Upon Procedure engagements, specifically SSAE Nos. 10-17. These now fall under SSAE 18.

As the SSAE 18 was released, it was welcomed with open arms since it caused an interesting, and much needed, turn of events. Vendor Management is no longer just your problem, it’s also your vendor’s problem.

Our customers who use our System and Organization Controls (SOC) Analysis service already know that subservice organizations are a focus in our analyses. The SSAE 18 has furthered our ability to provide even more insight into the information security position of your vendors.

Bad News About SSAE 18 

The bad news is this doesn’t provide you with any additional assurance as the scope of your vendor’s audit will not include the operating effectiveness of the controls at your vendor’s subservice organization. However, it will provide the guidance you need to perform an informed review of the fourth party’s SOC 1 or 2 report or other available and comparable documentation. To learn more about these reports, download our Understanding the Differences Between a SOC 1, 2 and 3 infographic. 

What Should Be Happening?

By now, you should be seeing SSAE 18s being provided by vendors. This should give you further clarification as far as their critical vendors whom assist with their operations. From there, you’ll know how to monitor and perform more extensive due diligence on.

The SSAE 18 Brought Key SOC 1 Updates

Three important SOC 1 updates include: 

  • Requirement of risk assessments based on control objectives within the SOC
  • Refined Complementary User Entity Controls (CUECs) so that only controls that directly relate back to the product/service in scope of the report are noted
  • Auditors are required to gain further clarification and understanding, although not required to be noted in the report

Go through all the all the steps you need to know for SSAE 18 in more detail. Download the eBook.

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