SOC 2 reports are attestation reports. With those types of reports, the Certified Public Accountant or CPA (i.e. service auditor) will have an opinion on management’s assertion as it relates to the system and its ability to meet commitments, system requirements, and objectives. This quick blog will show you the various types of report opinions that SOC 2 can result in and what each means.

Different Opinions

Unqualified Opinion

The first and most common SOC 2 report opinion is unqualified. Basically, that means it’s a “clean” opinion. No issues were noted in the description, controls, testing, etc. that would cause a modification of the opinion, and management’s assertion is deemed reasonable. This is the type of opinion you should be striving for. When you hear people refer to “passing” a SOC 2 examination, they are more than likely referring to an unqualified opinion.

The two main factors that drive the other opinions are scope limitations and material misstatements. A scope limitation is when your company is not able to provide evidence for the auditor. Material misstatements can happen due to a system description being misstated, controls not designed appropriately, or controls not operating effectively (exceptions or deviations in the testing of controls).

A control may have failed due to these exceptions, which in turn caused you to fail to meet criteria appropriately, or fail to meet commitments or system requirements (this is the most common cause of opinions other than unqualified). For example, a common control in a SOC 2 report is a requirement to perform risk assessments on at least an annual basis. If you did not perform a risk assessment within your testing period, this would be a control failure and would be denoted as an exception or deviation in your report.

Qualified Opinion

The next most common is a qualified opinion. This means that the report was mostly OK, but there was an issue somewhere. If there was a scope limitation and/or material misstatement, it might be material to the report (causing the qualification), but not pervasive enough to go any further. Should you panic if you have a qualified opinion? NO! Qualified opinions are more common than you think. Exceptions happen. It’s not the end of the world. Especially if it was one control that had an exception and everything else was fine. Many firms opt to explain their exceptions and why it was a rare occurrence or how they fixed it in an optional “unaudited” section of the report for management to respond to exceptions in testing (section 5 of the report).

Disclaimer of Opinion

Less common is the disclaimer of opinion, which mostly results from if there was a severe inability for your company to produce evidence for the examination (the scope limitation was material and pervasive).

Adverse Opinion

The least common is the adverse opinion. This rare report results from if there were material misstatements that were both material and pervasive to the point that the control environment is pretty much failing to meet either criteria, commitments, system requirements, or objectives.

Here is a graphic to help visualize how the opinions (other than unqualified) can happen:

SOC 2 Report Opinions

You should always strive for an unqualified opinion for your SOC 2. The first step in that is to make sure you have a solid control environment that is designed appropriately.

A Bytechek readiness assessment is a great way to get that started! Once suitability is determined to be OK (we recommend a type 1 report), just to make sure you operate your controls as described. If you do, you will reduce your likelihood of exceptions in testing, paving the way for your unqualified SOC 2 Type 2 report.

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