ISC CPA Exam: Understanding the Types of Subject Matters a Practitioner May be Engaged to Report on Using the Trust Services Criteria

Introduction

Purpose

In this article, we’ll cover understanding the types of subject matters a practitioner may be engaged to report on using the trust services criteria. The Trust Services Criteria (TSC) serve as a cornerstone for evaluating and maintaining the integrity of an organization’s internal controls, particularly in areas related to information security, operational availability, data processing, confidentiality, and privacy. Developed by the American Institute of Certified Public Accountants (AICPA), these criteria are critical in engagements where companies seek independent validation of their controls to meet regulatory and client expectations.

In today’s digital landscape, organizations face growing risks related to cybersecurity, data breaches, and privacy concerns. The TSC provides a structured approach for assessing whether these risks are adequately mitigated, ensuring that organizations are equipped to protect their data and operational infrastructure. Practitioners use the TSC to evaluate systems based on five key categories: security, availability, processing integrity, confidentiality, and privacy. This framework is designed to give stakeholders confidence that the organization’s systems are properly managed and that sensitive information is safeguarded against potential threats.

Relevance

For practitioners—particularly those preparing for the ISC CPA exam—understanding the subject matters covered by the Trust Services Criteria is critical. The Trust Services Criteria not only serve as a guide for SOC (System and Organization Control) reporting but also form the basis for ensuring compliance with various legal, regulatory, and contractual requirements. Mastering the TSC and its application in practice is essential for professionals providing assurance services, as it equips them with the ability to perform comprehensive evaluations of client systems and report on key areas that impact business operations.

From an exam perspective, exam candidates must demonstrate a solid understanding of how these criteria are applied across different subject matters. They should be able to identify the specific risks that pertain to each category, such as potential security vulnerabilities or the adequacy of privacy protections, and how to design engagements that assess the effectiveness of the relevant controls. This knowledge is also fundamental for auditors and assurance providers who are responsible for issuing SOC reports, where the accuracy and completeness of an organization’s internal controls are assessed.

Scope

This article will provide an in-depth look at the types of subject matters practitioners may be engaged to report on using the Trust Services Criteria. It will cover each of the five key categories—security, availability, processing integrity, confidentiality, and privacy—in detail, discussing what each entails and how they fit into different types of engagements. The article will also explore the types of engagements in which these subject matters are most commonly evaluated, such as SOC 2 and SOC for Cybersecurity reports, and the role practitioners play in delivering assurance over these areas.

By the end of the article, readers will have a comprehensive understanding of:

• The Trust Services Criteria and its five core categories.
• The types of subject matters that can be assessed during an engagement.
• The importance of these subject matters in evaluating and reporting on an organization’s internal controls.
• Practical examples of how these criteria are applied in real-world engagements.

This understanding is not only vital for ISC CPA candidates but also for practitioners who are looking to specialize in providing assurance services, particularly as organizations increasingly seek independent verification of their systems to meet evolving regulatory demands.

Overview of the Trust Services Criteria (TSC)

Definition

The Trust Services Criteria (TSC) are a set of principles and criteria established by the American Institute of Certified Public Accountants (AICPA) for evaluating and reporting on the reliability of a company’s systems and controls. The TSC provides a framework that practitioners use to assess and report on an organization’s internal controls, specifically in the context of risk management and data security. These criteria are essential in engagements such as System and Organization Control (SOC) reporting, where organizations seek independent assurance regarding the design and effectiveness of their controls across various subject areas.

The Trust Services Criteria are designed to address the growing importance of information security, privacy, and operational resilience in today’s digital environment. Practitioners use the TSC to evaluate systems based on established standards, ensuring that businesses can confidently demonstrate their ability to protect sensitive information, meet regulatory requirements, and maintain reliable operations.

The Five Categories of TSC

The Trust Services Criteria are divided into five key categories, each addressing a specific area of system control. These categories are used to evaluate whether an organization’s controls are appropriately designed and operating effectively to meet the criteria established by the AICPA.

1. Security

Security focuses on whether a system is protected against unauthorized access, both physical and logical. This category addresses the risk of data breaches, cyberattacks, and other security threats that could compromise the integrity of a system. Practitioners assess the controls in place to prevent unauthorized access, detect potential security incidents, and respond to breaches. Security is a foundational element in SOC reports, as it directly impacts an organization’s ability to safeguard information and systems from external and internal threats.

2. Availability

Availability examines whether a system is accessible and operational when needed to meet business objectives or customer expectations. It focuses on the system’s ability to remain functional, ensuring continuous access and uptime. Practitioners evaluate the controls related to system performance, disaster recovery, and maintenance activities that could affect system availability. This category is particularly relevant for organizations that offer services where uptime and operational continuity are critical to success.

3. Processing Integrity

Processing Integrity assesses whether a system processes data in a complete, accurate, and timely manner. This category ensures that transactions and data inputs are correctly recorded, processed, and output as intended, without errors or manipulation. Practitioners evaluate controls that address data accuracy, completeness, and validation processes. This is crucial in industries where processing errors could result in financial loss or operational disruptions, such as in financial services or e-commerce.

4. Confidentiality

Confidentiality focuses on whether sensitive information is protected from unauthorized disclosure. This category addresses the risk of exposing confidential business or personal data to unauthorized parties, which could result in legal or reputational damage. Practitioners assess the organization’s controls over the collection, storage, and transmission of confidential information. Controls may include encryption, access restrictions, and secure data storage practices.

5. Privacy

Privacy examines how personal information is collected, used, retained, disclosed, and destroyed in accordance with relevant privacy laws and organizational policies. This category is particularly important for organizations that handle personal data, such as healthcare providers, financial institutions, and e-commerce businesses. Practitioners evaluate controls designed to ensure compliance with privacy regulations like the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). The privacy criteria ensure that personal information is handled in a way that respects individuals’ rights and complies with legal requirements.

Framework

The AICPA plays a pivotal role in establishing the Trust Services Criteria as the foundation for SOC reporting. The TSC provides the structure and guidelines for practitioners to evaluate the internal controls of organizations in a consistent and reliable manner. The AICPA’s framework ensures that SOC reports, particularly SOC 2 and SOC for Cybersecurity, are conducted using recognized and standardized criteria, allowing stakeholders to trust the results.

The SOC 2 report is based on the Trust Services Criteria and is intended for organizations that need to demonstrate the effectiveness of their controls related to security, availability, processing integrity, confidentiality, and privacy. The SOC for Cybersecurity report is a more specialized engagement, focusing specifically on an organization’s cybersecurity risk management program. Both reports rely on the TSC to provide an objective assessment of an organization’s control environment, enabling stakeholders to evaluate whether the organization is adequately managing risks associated with system operations and data protection.

By establishing the Trust Services Criteria, the AICPA ensures that practitioners have a robust and consistent framework to assess and report on various subject matters related to internal controls. This framework is critical for organizations that rely on SOC reports to demonstrate their commitment to security, compliance, and operational integrity, and for exam candidates preparing to apply these concepts in real-world engagements.

Types of Subject Matters for Trust Services Engagements

What is a Subject Matter?

In the context of Trust Services engagements, a subject matter refers to the specific area or aspect of an organization’s system or operations that a practitioner is engaged to evaluate and report on. Subject matters are aligned with the five categories of the Trust Services Criteria (TSC) — security, availability, processing integrity, confidentiality, and privacy — and form the basis for the evaluation of internal controls.

Each subject matter is associated with different types of risks, compliance requirements, and stakeholder concerns. The role of the practitioner is to assess how well an organization has implemented and maintained controls that address these specific areas. Depending on the engagement type, such as a SOC 2 report, practitioners may evaluate one or more of these subject matters to provide assurance to stakeholders about the organization’s ability to manage risk and operate effectively.

Common Subject Matters

Security: Evaluating the Effectiveness of Controls That Protect Information and Systems from Unauthorized Access

Security is the most fundamental and widely assessed subject matter in Trust Services engagements. It focuses on protecting a system from unauthorized access, both physical and logical. This subject matter covers a range of controls, such as firewalls, encryption, intrusion detection systems, and access management protocols, all designed to prevent data breaches and cyberattacks.

Practitioners evaluate whether the organization has implemented appropriate security controls and whether these controls are effective in preventing, detecting, and responding to security threats. The security category is critical for organizations in industries like healthcare, financial services, and e-commerce, where the exposure of sensitive data can have significant legal and reputational consequences.

Availability: Assessing the System’s Availability to Meet Operational and Contractual Commitments

The availability subject matter deals with whether the system is available for operation and use as required. This is essential for organizations that depend on continuous access to systems for their daily operations, such as cloud service providers, online retailers, or utility companies.

In this area, practitioners assess whether the organization has controls in place to ensure that the system can handle expected loads and remain available during operational periods. This may include evaluating backup processes, system redundancy, disaster recovery plans, and service level agreements (SLAs). For stakeholders, availability is crucial because disruptions in service can result in financial loss, reputational damage, and non-compliance with contractual commitments.

Processing Integrity: Reporting on the Accuracy, Completeness, and Validity of System Processing

Processing integrity focuses on the system’s ability to process data in a complete, accurate, and valid manner. This subject matter is especially relevant for organizations that handle large volumes of transactions, such as financial institutions, e-commerce platforms, or logistics companies.

Practitioners assess whether the organization’s processes ensure the accuracy and reliability of transactions from input to output. This includes evaluating controls over data validation, system calculations, error handling, and system monitoring. Processing integrity is vital for industries where errors in data processing can lead to financial discrepancies, operational inefficiencies, or regulatory non-compliance.

Confidentiality: Verifying the Protection of Sensitive Information

The confidentiality subject matter examines how an organization protects sensitive information, such as intellectual property, trade secrets, or customer data. Confidentiality is critical for organizations in sectors like legal, healthcare, or financial services, where the unauthorized disclosure of information can result in severe legal and financial consequences.

In this area, practitioners evaluate controls designed to restrict access to sensitive information, such as encryption, secure storage methods, and access control policies. They also assess the organization’s processes for classifying and handling confidential data to ensure it is adequately protected from unauthorized disclosure or exposure.

Privacy: Examining How Personal Information is Collected, Used, Retained, and Disclosed in Compliance with Privacy Laws and Policies

Privacy focuses on the protection of personal information in line with relevant privacy laws and organizational policies. With the increasing importance of privacy regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), this subject matter has become crucial for organizations that collect and process personal data.

Practitioners assess whether the organization has implemented controls to ensure that personal information is handled in accordance with its privacy policies and applicable regulations. This includes reviewing how data is collected, used, stored, and shared, as well as how individuals are informed about their rights and options regarding their personal information. The privacy subject matter is essential for maintaining trust with customers and complying with legal obligations related to data privacy.

By addressing these common subject matters, Trust Services engagements help organizations demonstrate their commitment to operational integrity, data security, and compliance with regulatory requirements. Each subject matter plays a vital role in ensuring that an organization’s internal controls are robust and effective, providing stakeholders with the assurance they need to trust the organization’s systems and processes.

Engagement Types and Reporting Options

SOC 2 Engagements

SOC 2 engagements are designed to evaluate an organization’s system against the Trust Services Criteria (TSC) for specific stakeholders, such as customers, partners, or regulators. The primary focus of these engagements is to provide assurance over the organization’s internal controls related to security, availability, processing integrity, confidentiality, and privacy. These reports are critical for organizations that need to demonstrate their ability to meet compliance requirements, manage risks, and ensure the reliability of their operations.

Purpose

The purpose of a SOC 2 engagement is to provide assurance to stakeholders that an organization has established and maintained effective controls over its systems. SOC 2 reports are particularly relevant for service organizations, such as cloud providers, data centers, or SaaS companies, where stakeholders need assurance that the systems they rely on are secure, available, and functioning properly.

SOC 2 reports are intended for a limited audience—usually existing customers, partners, and regulators—who require detailed information about the organization’s controls to assess risk and ensure that the organization meets industry standards and regulatory requirements.

Type 1 Report: Evaluation of the Design of Controls as of a Point in Time

A SOC 2 Type 1 report evaluates the design of an organization’s controls as of a specific point in time. The practitioner assesses whether the controls are suitably designed to meet the relevant Trust Services Criteria. This report is focused on determining whether the organization has implemented appropriate controls, but it does not assess the operating effectiveness of those controls over time.

Type 1 reports are typically used when an organization is in the early stages of implementing controls or needs to provide immediate assurance that it has designed controls to address key risks. Stakeholders may use this report to gain confidence in the control design but will require further assurance about their effectiveness in practice, which is provided in a Type 2 report.

Type 2 Report: Evaluation of the Effectiveness of Controls Over a Specified Period

A SOC 2 Type 2 report goes beyond the design of controls and evaluates their operating effectiveness over a specified period, typically six months to a year. This report is more comprehensive than a Type 1 report, as it demonstrates how well the controls are functioning in practice over time.

In a Type 2 engagement, the practitioner tests the controls to ensure that they operate effectively and consistently during the reporting period. This type of report is highly valued by stakeholders because it provides assurance that the organization’s controls are not only well-designed but are also operating as intended to manage risks and protect the system.

SOC 2 Type 2 reports are essential for organizations that want to demonstrate sustained compliance and control effectiveness, particularly in industries where continuous security, availability, and processing integrity are critical.

SOC 3 Engagements

SOC 3 engagements provide a general-use report that offers a high-level overview of the organization’s compliance with the Trust Services Criteria. Unlike SOC 2 reports, SOC 3 reports are designed for a broader audience, including the general public, and contain less detailed information about the specific controls tested and the results of those tests.

Purpose

The purpose of a SOC 3 report is to provide a seal of assurance to a wider audience that an organization meets the Trust Services Criteria without disclosing sensitive details. These reports are often used by organizations as a marketing tool to publicly demonstrate their commitment to security, privacy, and operational integrity.

Since SOC 3 reports are less detailed, they are more accessible to non-technical audiences, such as prospective customers or investors, who need assurance that the organization has effective controls in place but do not require the level of detail found in a SOC 2 report.

SOC for Cybersecurity

SOC for Cybersecurity is a specialized type of engagement that focuses specifically on evaluating an organization’s cybersecurity risk management program. This type of engagement is becoming increasingly important as cybersecurity threats continue to grow, and organizations need to demonstrate that they have effective measures in place to manage these risks.

Purpose

The purpose of a SOC for Cybersecurity engagement is to provide stakeholders with assurance about the effectiveness of an organization’s cybersecurity risk management program. Practitioners assess the organization’s policies, procedures, and controls related to identifying, assessing, and managing cybersecurity risks. This report is particularly valuable for organizations that handle sensitive data or operate in high-risk industries where cybersecurity incidents could have significant consequences.

Unlike SOC 2 reports, which cover a broad range of system controls, SOC for Cybersecurity focuses exclusively on how well an organization protects against cybersecurity threats and responds to incidents. This type of report is essential for stakeholders who need confidence that the organization is equipped to defend against cyberattacks and mitigate potential damages.

Each of these SOC engagements plays a crucial role in helping organizations provide stakeholders with assurance over their systems and controls. The type of report selected depends on the organization’s needs and the level of detail required by stakeholders to evaluate the organization’s risk management practices.

Practitioner’s Responsibilities in TSC Engagements

Understanding Client’s Business and Risk Environment

A critical responsibility for practitioners in Trust Services Criteria (TSC) engagements is gaining a deep understanding of the client’s business, industry, and risk environment. This foundational knowledge allows practitioners to identify the relevant subject matters—such as security, availability, processing integrity, confidentiality, or privacy—that need to be addressed within the engagement.

Practitioners begin by analyzing the organization’s operations, regulatory environment, and key risks. For example, a financial services company handling sensitive customer data may have heightened risks around confidentiality and privacy, while an e-commerce platform might focus more on processing integrity and availability to ensure smooth transactions.

To properly identify relevant subject matters, practitioners should:

• Conduct risk assessments to identify potential threats to the organization’s systems.
• Review regulatory and compliance requirements that apply to the organization (e.g., GDPR for privacy).
• Assess the organization’s technology infrastructure and any dependencies on third-party service providers.
• Engage with client stakeholders to gain insights into their specific concerns and objectives regarding internal controls and system performance.

By understanding these aspects of the client’s environment, practitioners can tailor their engagement to focus on the most significant subject matters that impact the organization and its stakeholders.

Assessing and Evaluating Controls

Once the relevant subject matters have been identified, the next responsibility of the practitioner is to assess and evaluate the organization’s controls related to each subject matter. The assessment of controls ensures that they are properly designed to meet the Trust Services Criteria and that they effectively mitigate risks.

Key steps in the engagement process for evaluating controls include:

1. Planning the engagement: Practitioners develop an engagement plan that outlines which subject matters will be evaluated and how the organization’s controls will be tested.
2. Reviewing control design: Practitioners assess whether the controls in place are adequately designed to address the identified risks. For example, in the context of security, this could involve reviewing firewalls, access controls, and encryption protocols to ensure they protect against unauthorized access.
3. Testing operating effectiveness: In engagements like SOC 2 Type 2, practitioners evaluate how well the controls have functioned over a specific period. This involves performing tests of controls, such as reviewing logs, conducting interviews, and observing processes to verify that controls are operating as expected.
4. Identifying control gaps or weaknesses: If controls are found to be deficient or ineffective, practitioners document these issues and assess their potential impact on the organization’s ability to meet the Trust Services Criteria.
5. Providing recommendations: In some cases, practitioners may offer recommendations to improve control design or implementation, especially if they identify areas where the organization can better mitigate risks.

By following these steps, practitioners provide assurance that the organization’s controls are effectively designed and implemented to meet the criteria for the relevant subject matters.

Communication and Reporting

Clear, transparent communication and reporting are essential in TSC engagements. Stakeholders rely on these reports to assess the organization’s internal controls and make informed decisions based on the practitioner’s findings.

Effective communication involves:

• Engaging with management throughout the engagement: Practitioners should maintain open lines of communication with the organization’s management team to ensure they are aware of the engagement’s scope, progress, and any issues that arise.
• Providing timely feedback: If control weaknesses or risks are identified during the assessment, it is crucial to inform the client promptly so they can take corrective action before the final report is issued.
• Preparing the final report: The practitioner’s report should clearly outline the scope of the engagement, the subject matters evaluated, the controls tested, and the results of those tests. This includes any findings related to control gaps or deficiencies and an assessment of how these issues might impact the organization’s ability to meet the Trust Services Criteria.

Transparent reporting is key to maintaining trust between the organization and its stakeholders. A well-structured report allows stakeholders to understand both the strengths and weaknesses of the organization’s controls, enabling them to make more informed decisions regarding risk management and compliance.

Practitioners play a pivotal role in ensuring that organizations meet the Trust Services Criteria. Their responsibilities include thoroughly understanding the client’s environment, conducting comprehensive assessments of controls, and communicating their findings in a clear and transparent manner. These actions help organizations strengthen their internal controls and provide stakeholders with the assurance they need.

Challenges and Considerations in TSC Engagements

Determining Scope

One of the primary challenges in Trust Services Criteria (TSC) engagements is determining the appropriate scope. Selecting the correct subject matters for evaluation is crucial, as it defines the focus of the engagement and impacts the value of the report for stakeholders. However, identifying the most relevant subject matters can be complex, as organizations often operate in dynamic environments with varying risks, regulatory requirements, and stakeholder concerns.

Key challenges in determining scope include:

• Balancing breadth and depth: Practitioners must decide whether to assess all five TSC categories (security, availability, processing integrity, confidentiality, and privacy) or to focus only on those most relevant to the organization’s operations and stakeholder needs. A too-narrow scope may omit important risks, while a too-broad scope may be resource-intensive without providing additional value.
• Understanding business priorities: Different industries and business models prioritize different risks. For instance, a healthcare provider may prioritize privacy, while a cloud services company may focus on availability and security. Practitioners must work closely with clients to align the scope of the engagement with business priorities and stakeholder expectations.
• Emerging risks and technology: As businesses adopt new technologies, such as cloud computing and artificial intelligence, practitioners must consider how these innovations introduce new risks and may require a broader or more targeted evaluation of controls.

Practitioners must carefully navigate these challenges, ensuring that the scope is both comprehensive enough to provide valuable assurance and focused enough to be practical and cost-effective for the organization.

Evaluating Control Effectiveness

Evaluating the effectiveness of controls within a TSC engagement often presents its own set of challenges. Controls must not only be well-designed, but they also need to be operating effectively over time to meet the requirements of the Trust Services Criteria. Common issues practitioners encounter while assessing controls include:

• Incomplete documentation: Organizations may lack proper documentation for certain controls, making it difficult for practitioners to assess how well those controls are functioning. This is particularly common in smaller organizations that may not have robust governance structures.
• Control inconsistencies: Controls that are inconsistent across different departments or locations can undermine the effectiveness of the overall system. Practitioners often find that while controls may be designed well in one area, they may not be applied with the same rigor in others, leading to potential gaps in risk mitigation.
• Evolving threat landscape: With cybersecurity threats constantly evolving, controls that were once sufficient may no longer be effective. Practitioners need to account for emerging risks, such as ransomware and advanced persistent threats (APTs), when assessing the ongoing effectiveness of controls, particularly in areas like security and privacy.
• Change management issues: Organizations frequently update their systems, software, and processes, which can impact the effectiveness of previously established controls. Practitioners need to evaluate whether the organization’s change management processes are effective in maintaining control integrity during transitions.

Overcoming these challenges requires a combination of technical expertise, rigorous testing procedures, and ongoing communication with the organization’s management team to ensure that controls are both well-designed and consistently applied.

Data Privacy Laws and Compliance

The rise of global data privacy laws, such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States, has significantly impacted the privacy subject matter in TSC engagements. These regulations impose strict requirements on how organizations collect, store, process, and share personal information, creating additional layers of complexity for practitioners.

Challenges related to data privacy laws include:

• Understanding regulatory requirements: GDPR, CCPA, and other data privacy laws have distinct and often complex requirements, including data subject rights, consent mechanisms, and data breach notification obligations. Practitioners must ensure that the organization’s privacy controls are not only designed to meet the Trust Services Criteria but are also compliant with these laws.
• Cross-border data transfers: Many organizations operate globally, which complicates data privacy compliance. Practitioners need to evaluate whether appropriate safeguards are in place for cross-border data transfers, particularly in light of the GDPR’s stringent requirements for transferring data outside the European Economic Area (EEA).
• Data minimization and retention: Privacy laws often require organizations to minimize the collection of personal data and limit retention to only what is necessary. Practitioners must assess whether organizations have adequate controls in place to comply with these requirements, such as data retention schedules and data anonymization techniques.
• Breach response and reporting: GDPR and CCPA both mandate that organizations have mechanisms in place for reporting data breaches to regulatory authorities and affected individuals within specific timeframes. Practitioners need to verify that the organization has effective incident response procedures and that these are aligned with regulatory obligations.

Failure to comply with privacy regulations can result in significant penalties, making this an increasingly critical area of focus in TSC engagements. Practitioners must ensure that privacy controls not only meet the Trust Services Criteria but also address the legal and regulatory requirements that apply to the organization’s operations.

Navigating these challenges requires a deep understanding of both the technical aspects of controls and the regulatory landscape in which the organization operates. By carefully determining scope, thoroughly evaluating controls, and ensuring compliance with data privacy laws, practitioners can deliver valuable insights and assurance in TSC engagements.

Best Practices for Preparing a TSC Report

Comprehensive Planning

The foundation of a successful Trust Services Criteria (TSC) report lies in comprehensive planning. Practitioners must ensure a thorough understanding of the organization’s systems, business operations, and industry-specific needs before embarking on the evaluation process. Effective planning involves several key steps:

• Performing a risk assessment: Identify the organization’s key risks and regulatory requirements to determine which Trust Services Criteria categories (security, availability, processing integrity, confidentiality, and privacy) are most relevant to the engagement.
• Mapping systems and processes: Understand the organization’s IT infrastructure, data flows, and key business processes. This ensures the engagement covers all critical areas where the organization’s controls may impact stakeholders.
• Defining scope and objectives: Collaborate with the client to define the scope of the engagement and the specific objectives of the TSC report. Determine whether the focus will be on a single criterion (e.g., security) or a broader evaluation covering multiple criteria.
• Developing an engagement plan: Outline the steps for control assessment, including which subject matters will be evaluated, the testing methodologies to be employed, and the timeframe for the engagement.

By investing time in comprehensive planning, practitioners can ensure the engagement is tailored to the client’s specific needs and that the scope covers the most relevant areas of risk.

Collaboration with Management

Effective collaboration with management is essential for accurately assessing the subject matters in a TSC engagement. Management plays a critical role in providing the necessary information about the organization’s systems, controls, and objectives, making close communication and cooperation key to the success of the engagement.

• Engaging management early: Involve the client’s management team at the outset of the engagement to gather insights on their priorities, challenges, and expectations. This collaboration helps practitioners align the engagement plan with the organization’s business goals and regulatory obligations.
• Understanding control environments: Work closely with management to gain an understanding of the organization’s control environments, including how key processes are designed, implemented, and monitored. This ensures that practitioners can accurately assess the controls in place for each subject matter.
• Ongoing communication: Maintain regular communication with management throughout the engagement to address any emerging issues or changes in the organization’s systems or operations. Continuous dialogue helps practitioners stay informed about developments that may impact the assessment of controls.
• Obtaining documentation: Collaborate with management to gather relevant documentation for the engagement, such as system architecture, data flow diagrams, policy documents, and control logs. This documentation is essential for a thorough evaluation of the organization’s systems.

By fostering a strong working relationship with management, practitioners can ensure that they have the necessary information and support to conduct a meaningful assessment and deliver an accurate TSC report.

Continual Monitoring and Testing

Maintaining compliance with the TSC criteria is not a one-time effort. Organizations need to continually monitor and test their controls to ensure they remain effective over time. Best practices for continual monitoring and testing include:

• Establishing monitoring protocols: Encourage clients to implement automated monitoring tools and regular control checks to ensure ongoing compliance with the TSC. These protocols can help detect control failures or deviations early, allowing the organization to take corrective action before issues escalate.
• Performing periodic testing: Regularly test controls to confirm their ongoing effectiveness, particularly in areas like security and availability where external threats are constantly evolving. For example, conducting routine vulnerability scans, penetration testing, and access reviews can help ensure that controls continue to protect against unauthorized access.
• Tracking regulatory changes: Stay informed about updates to relevant regulations, such as GDPR, CCPA, and industry-specific standards. Practitioners should advise clients on any necessary adjustments to their controls or reporting practices to maintain compliance with changing requirements.
• Documenting changes in systems: As organizations update their systems or adopt new technologies, controls may need to be re-evaluated. Encourage clients to document any changes to their IT infrastructure, processes, or data handling practices, and integrate these updates into the ongoing control evaluation process.

By advising clients to implement continual monitoring and testing practices, practitioners help organizations maintain ongoing compliance with the TSC criteria, ensuring that they can continue to meet stakeholder expectations and regulatory requirements over time.

By following these best practices, practitioners can produce a high-quality TSC report that provides valuable insights into the organization’s control environment and demonstrates compliance with the Trust Services Criteria. Comprehensive planning, strong collaboration with management, and continual monitoring are all critical components of a successful TSC engagement.

Example Scenarios

Security Engagement Example: A Company Seeking a SOC 2 Type 2 Report for Customer Assurance

A mid-sized cloud services provider that hosts sensitive customer data for its clients is seeking a SOC 2 Type 2 report to assure its customers that their data is protected against unauthorized access. The company operates in a competitive industry where customers frequently demand proof of robust security practices as part of their procurement process.

To meet these demands, the organization engages a practitioner to perform a SOC 2 Type 2 assessment, specifically focusing on the security Trust Services Criteria. The engagement involves evaluating the company’s security controls over a six-month period, including firewalls, access management systems, intrusion detection, encryption protocols, and incident response procedures.

The practitioner conducts tests of control design and effectiveness, reviewing system access logs, penetration test results, and encryption standards to ensure the controls are functioning as intended. The SOC 2 Type 2 report produced at the end of the engagement provides the company’s customers with independent assurance that their data is secure, helping the company enhance its credibility and meet client expectations in a highly regulated industry.

Privacy Engagement Example: A Healthcare Organization Ensuring Compliance with HIPAA Regulations

A large healthcare provider that processes patient medical records engages a practitioner to assess its privacy controls under the Trust Services Criteria for Privacy. The organization is concerned about its compliance with the Health Insurance Portability and Accountability Act (HIPAA), which sets strict guidelines for how personal health information (PHI) must be collected, used, and protected.

The practitioner evaluates the healthcare provider’s privacy controls, focusing on how PHI is collected, stored, accessed, and shared. Key areas of assessment include patient consent management, data encryption, access control policies, and data retention procedures. The practitioner also reviews the organization’s response mechanisms for handling potential data breaches, ensuring that they align with HIPAA’s breach notification requirements.

By conducting tests on privacy controls and reviewing the organization’s policies, the practitioner helps the healthcare provider identify any gaps in compliance. The resulting TSC privacy report provides stakeholders—such as regulators, patients, and business partners—with assurance that the organization is taking the necessary steps to protect patient data and comply with privacy laws.

Processing Integrity Example: An Online Retailer Verifying Transaction Accuracy During the Holiday Season

An online retailer that experiences a surge in transactions during the holiday season seeks assurance that its order processing system is functioning accurately and reliably. The company is concerned that a failure in its system’s processing integrity could lead to lost or incorrect orders, which would negatively impact customer satisfaction and revenue.

The retailer engages a practitioner to evaluate its processing integrity controls under the Trust Services Criteria. The practitioner focuses on how the system records, processes, and outputs data for online orders. Key controls tested include order validation mechanisms, payment processing systems, error-checking protocols, and system monitoring processes that ensure all transactions are processed accurately and completely.

During the engagement, the practitioner tests the accuracy of data inputs and outputs by reviewing sample transactions and performing reconciliations between system logs and the retailer’s financial records. The practitioner also assesses whether the system’s error-handling procedures are effective in identifying and correcting processing issues.

The final TSC report provides the retailer with confidence that its system is operating as intended during the high-transaction holiday period. It helps the company assure stakeholders—such as customers and payment processors—that their transactions are being processed with integrity, minimizing the risk of errors and enhancing operational efficiency.

These example scenarios demonstrate how TSC engagements can be tailored to address specific subject matters—security, privacy, and processing integrity—in diverse industries. Each engagement helps organizations mitigate risks, comply with regulations, and provide stakeholders with valuable assurance regarding their control environments.

Conclusion

Recap

Throughout this article, we have explored the types of subject matters that practitioners may be engaged to report on using the Trust Services Criteria (TSC). These subject matters—security, availability, processing integrity, confidentiality, and privacy—form the foundation for evaluating an organization’s internal controls in key areas. We’ve discussed how each of these subject matters plays a vital role in ensuring an organization’s systems are reliable, secure, and compliant with regulatory requirements. Whether it’s evaluating the effectiveness of controls protecting sensitive data, ensuring systems remain available to meet operational needs, or verifying the accuracy of system processing, these subject matters are critical for both organizations and their stakeholders.

Importance of Practitioner Expertise

The role of the CPA practitioner is paramount in delivering meaningful assurance to organizations and their stakeholders through TSC engagements. Practitioners bring specialized expertise in understanding the complexities of system controls, identifying key risks, and evaluating whether controls are adequately designed and effectively operating. As organizations increasingly face pressures related to cybersecurity, privacy regulations, and operational integrity, the demand for trust services reports continues to grow. Practitioners, through their ability to apply the TSC framework, provide essential insights that help organizations mitigate risks and demonstrate compliance with industry standards. Their work not only ensures that organizations meet trust services standards but also fosters confidence and trust among customers, regulators, and business partners.

Final Thoughts

For those studying for the ISC CPA exam, a deep understanding of the various subject matters covered by the Trust Services Criteria is crucial. Success in your studies—and in future professional engagements—hinges on mastering the principles that underpin security, availability, processing integrity, confidentiality, and privacy. By familiarizing yourself with how these subject matters are applied in real-world scenarios, you will be better equipped to meet the demands of your clients and the evolving regulatory landscape. With this knowledge, you can confidently assess and report on the controls that matter most to organizations, helping them navigate complex risk environments while enhancing their operational effectiveness.

As you progress in your CPA journey, remember that the expertise you develop in Trust Services Criteria engagements will not only help you succeed in your exam but also empower you to provide vital assurance services in your professional career.