a table that seems to require indicating whether certain statements apply to SOC 1 Type 1 reports, SOC 1 Type 2 reports, or neither. I'll explain the key differences between SOC 1 Type 1 and SOC 1 Type 2 reports
which should help clarify which items apply to each report type:
- SOC 1 Type 1 report evaluates the suitability of the design of a service organization's controls at a specific point in time. This report focuses on the design of controls rather than their operating effectiveness over a period of time.
- SOC 1 Type 2 report also evaluates the suitability of the design of a service organization's controls, but unlike Type 1, it additionally assesses the operating effectiveness of those controls over a defined period.
Based on these definitions, here is how the items typically relate to SOC 1 Type 1 and Type 2 reports:
1. Report expresses an opinion on the suitability of the design of the internal controls.
- Applicable to both Type 1 and Type 2, as both evaluate design suitability.
2. Would be obtained in the audit of an issuer, rather than a non-issuer.
- Neither (N), as SOC reports are not specific to issuers or non-issuers but to service organizations.
3. Obtained from a component auditor in the audit of group financial statements.
- Could potentially be applicable to both, depending on the context.
4. Service auditor required to obtain an understanding of the service organization's internal controls.
- Applicable to both Type 1 and Type 2, as understanding is necessary for both types of reports.
5. Report includes the service organization management's responsibility for internal control.
- Type 2, as it involves a period of time and management's responsibility over that period.
6. Service auditor required to perform tests of controls.
- Type 2, as testing operating effectiveness is part of a Type 2 report.
7. Report expresses an opinion on the fairness of the description of internal controls.
- Both Type 1 and Type 2 reports provide an opinion on the fairness of the description of the controls.
8. Use of report is limited to specified users.
- Neither (N), as SOC reports are generally restricted to users who understand the services provided by the service organization.
9. Report expresses an opinion on the operating effectiveness of internal controls.
- Type 2, as it assesses the effectiveness over a period.
10. Report indicates the examination was conducted in accordance with attestation standards established by the AICPA.
- Applicable to both Type 1 and Type 2, as both are conducted under AICPA standards.
11. Report provides limited assurance on the suitability of the design of the internal controls.
- Type 1 provides a point-in-time assessment of design suitability but does not provide assurance on operating effectiveness, which could be interpreted as limited assurance.
For each item, it's important to understand the context and the standard guidelines to make the correct classification. This classification is based on typical attributes of SOC 1 reports but always refer to the authoritative guidance for the most accurate determination.
the complete Question is given below: