Video: Detecting Deficiencies in Processing Integrity Controls in a SOC 2 Engagement

In this lesson, Nick Palazzolo, CPA, delves into the nuances of detecting deficiencies in processing integrity controls during a SOC 2 engagement. He starts by simplifying the array of SOC engagements and emphasizes their importance in assessing the processing integrity of information systems, ensuring data is delivered accurately, timely, and properly. Nick outlines a structured approach to review and evaluate control designs and their operational effectiveness, focusing on input, processing, and output controls. He also discusses how to identify and address deficiencies and deviations in system authorizations, data validation, and error correction procedures. Through practical examples and a step-by-step walkthrough, Nick provides clear insights into improving control designs and operational effectiveness, ultimately enhancing decision-making and regulatory compliance in organizational settings.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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Next up, let's talk about detecting deficiencies in processing integrity controls in a SOC 2 engagement. Like I said, we're not gonna get too much into this. There's SOC 1, we've got SOC, not to overwhelm you, we will break this down much better later on in our later lessons. You got SOC 1, type 1, SOC 1, type 2, SOC 2, type 1, SOC 2, type 2, and then you got SOC 3s. We'll talk about all of that. Again, this is kind of just like a prelude introduction to all of that. Detailed, very easily digestible ways to see that later on. So in a SOC 2 engagement, which again, if you take an audit, you probably have a good understanding of what this is. Just think of a SOC 2 engagement, right? That's what this is. Just like you would think of an audit or a compliance or a tax engagement. This is a type of engagement. You're assessing the processing integrity of an information system involves evaluating whether the system achieves its purpose, such as delivering the right data at the right time and in the right manner. This assessment guided by the trust services criteria. So this trust services criteria is tied to SOC 2. You want to know that, memorize that, that again, just think of these one in one. When you see SOC 2, think of trust services criteria. When you see trust services criteria, think SOC 2. It includes examining the design and operational effectiveness of controls. Here's a structured approach to detect deficiencies and deviations. Like I said, it's that trifecta, the triangle, right? Design implementation and maintenance of those controls. If one of those, DIM, design implementation and maintenance or management, you could say, if any of these one, if

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