What is SOC 1?

SOC 1 (Service Organization Control 1) is an auditing standard developed by the American Institute of Certified Public Accountants (AICPA). SOC 1 reports focus on the controls at a service organization that are likely to be relevant to an audit of a user entity's financial statements. It evaluates the design and operating effectiveness of internal controls related to financial reporting. SOC 1 compliance is often required for service organizations that handle financial data for their clients, such as payroll processors, data centers, and SaaS providers.