Archive for the ‘SOC 2’ Category

Colocation Strategies – Perspectives from Data Center World

I was delighted to be invited to speak on security and compliance during the Colocation Tutorial at Data Center World last week in Las Vegas, Nevada.  The tutorial was an all-day session for enterprise data center operations executives – mostly data center operators from large corporations that currently outsource to a colocation facility.  I had the privilege of joining a panel comprising of executives from RagingWire, Equinix, Schneider Electric, Dominion Virginia Power, Transitional Data Center Services, and Neustar.

I wanted to give the readers who were not able to attend the conference or tutorial session some of my key takeaways from the event:

Not all colos are created equal – Fundamentally most individuals think that a colo facility just provides power and space.  However, those of us familiar with the business know that there can be embedded service providers and data centers within data centers.  Then, add a layer of complexity to the increased prominence of real estate companies, such as Digital Realty Trust, that specialize in data center property management.    Lee Tamassia from Equinix provided an excellent overview of the different models from wholesale to retail up to and including cloud services.  Mr. Tamassia then discussed how these models integrate with different data center standards.  I was then able to add onto these comments to discuss compliance responsibility between a data center and its tenants.

Data center operators may not think compliance is #1 priority – Imagine that!  When Jim Leach from RagingWire asked the audience who either managed or was exposed to compliance initiatives on a frequent basis – very few raised their hands.  Make no mistake – everyone expects the environment to be secure and more importantly reliable.  A few participants stated that compliance often was mandated from legal, IT security, or external auditors.  However, the day-to-day activities for these operation executives typically only revolve around topics such as power consumption, utilization, and resources – which affect the bottom line.

Security and compliance should be a topic of focus early on (during the selection and procurement process) – Steve Gunderson from Transitional Data Center Services and Jim Weber from Neustar walked through a template and evaluation process that included looking at security and availability features as well as available audits.  One participant from a manufacturing company stated that “I don’t handle credit card information, but the fact that the data center has gone through PCI, in my mind puts them at a higher level.”

The different compliance and certification acronyms can be confusing – I believe I was able to provide insight with this topic.  At a minimum, the participants walked away understanding that “SSAE 16 certified” was technically incorrect and could be an indication of misleading marketing.  We also discussed HIPAA, FISMA, and how a data center plays a role when its tenants (or the tenants’ customers) are the ones mandated to comply.

In summary, we auditors, just like those in security, can get so ingrained in the details of SOC reporting standards, PCI compliance requirements, FedRAMP authorizations, etc. that we often need reminding of the end-user’s perspective.  This conference brought a lot of insight to the auditor in me, and I hope the attendees took away some tangible recommendations and action points from the Colocation Tutorial.

On May 15th, I get another opportunity to speak – this time at the Uptime Institute conference in Santa Clara, CA. Hope to see you there!

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BrightLine a Sponsor at The Payroll Group’s 2013 Annual Conference in Austin, Texas

 
via BusinesWire

TAMPA, FL— May 2, 2013- BrightLine CPAs & Associates, Inc., a leading provider of attestation and compliance services, is pleased to announce their sponsorship of The Payroll Group’s (TPG) 2013 Annual Conference.  The conference will take place from May 8th through May 11th in Austin, Texas.

The conference is designed to help independent payroll service providers from across the country to reduce overhead costs, share business best practices, and discuss challenges and success stories.  This year’s conference will also highlight the utilization of state of the art technology in providing payroll services.

“BrightLine is honored to sponsor the TPG Annual Conference as we have seen the requests from payroll service providers for SOC  1 examinations and other related compliance services increase in recent years,” said Greg Miller, BrightLine’s attending Principal.  “This will be an ideal venue for us to share the market trends and compliance solutions with payroll providers.”

 

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BrightLine Joins Top Data Center Industry Experts To Discuss “Colocation Strategies Tutorial” at AFCOM Data Center World 2013

Via BusinessWire

TAMPA, FL — April 23, 2013 — BrightLine CPAs & Associates, Inc., a leading provider of compliance and attestation reporting services, will be part of the Colocation Strategies Tutorial Session at the AFCOM Spring Data Center World 2013 conference.  The conference will be held on April 29th, 2013, at The Mandalay Bay Resort and Casino in Las Vegas.

Doug Barbin, a BrightLine Principal, will join a panel of industry experts to discuss best practices for selecting a colocation provider.  He will be joined by leaders from other companies, including RagingWire Data Centers, Schneider Electric, Transitional Data Services, Dominion Virginia Power, Neustar and Equinix.  Mr. Barbin will focus specifically on the various assurance and compliance alternatives available to data center and colocation providers, such as the SOC examinations, PCI validation, ISO certification, and FedRAMP security assessment.

“Our goal in leading the Colocation Strategies Tutorial at AFCOM Data Center World is to educate enterprise IT and data center leaders so they can make informed decisions as buyers of data center colocation,” said Jim Leach, vice president of marketing at RagingWire.  “We are delighted to have Doug share his expertise on the critical topics of security and compliance.”

For more information about the Data Center World tutorials, please visit:

http://www.datacenterworld.com/spring2013/tutorials/

 

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HR and Payroll Service Providers Benefit from Attestation and Compliance Reports

Source – Workforce Management Channel

Today’s business environment is compliance heavy, under continuous scrutiny and intertwined with customer and legislative requirements. However, companies must still ensure compliance with the myriad of standards, requirements, laws, and regulations, such as SSAE 16 Examination (SOC 1), SOC 2/3 Examination, ISO Certification, FedRAMP Assessment, and hundreds more, across all areas of governance and programs.

As human resource and payroll service providers, or provider of any workforce management solutions, you must reassure customers about the security and integrity of their data stored within your environment. Being able to deliver a level of comfort to customers around financial, corporate, and personal information is the foundation of information security compliance and can be a significant differentiator from competitors.

That said, the compliance method highlighted here is the SSAE 16 examination, also referred to as a Service Organization Control (SOC 1) report. The SOC 1 report is an internationally accepted third party attestation report that is specifically designed for service organizations. A SOC 1 report provides service organizations and customers with a benchmark to compare internal controls and processes to industry standards. SOC 1 examinations are performed when the provider’s services are relevant to their customers’ internal controls over financial reporting. For human resource and payroll service providers, the report would include both information technology controls and transactional controls, for example, to help ensure that records are complete and accurate in recording account balances.

There are two types of SOC 1 reports. The service organization is responsible for specifying whether or not a “Type 1” or “Type 2” will be performed. A “Type 1” SOC 1 examination is performed when management requires a report on the fairness of presentation of the service organization’s internal controls over financial reporting and the suitability of the design of controls as of a specified date. A “Type 2” SOC 1 examination is performed when management requires a report on the fairness of presentation of the service organization’s internal controls over financial reporting and the suitability of the design and operating effectiveness of controls over a period of time, typically six months.

Service providers going through the examination process for the first time may opt to perform a readiness assessment, which simulates a SOC 1 examination. The readiness assessment identifies the controls that are believed to be in place and operating effectively for each applicable objective, and identifies relevant controls that are either not in place, or that are believed to be in place but are judged to be ineffective.

Your company may decide down the path of a SOC 1 report  based on a request or a contract, however don’t let that cloud your views on the several key benefits of obtaining the report:

  • Build trust and confidence with current and potential customers
  • Attain independent, third party assessment of controls
  • Provide a single examination to fulfill multiple customer requests
  • Obtain confirmation that controls in place are as management expects
  • Increase of market share

We have seen the requests for human resource and payroll service providers to obtain a SOC 1 report increase with the heightened awareness of outsourcing risks,  internal controls, data security incidents, regulatory compliance, and contractual obligations. Corporate governance boards and even shareholders want to see third party assurance over companies’ outsourced operations because of the inherent risk of outsourcing business functionality. The most efficient way to give comfort to customers is providing a third party assurance report. As such, many organizations have found it to be worthwhile to complete a SOC 1 examination before customers require it.

 

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“Become a Champion in Your Space” – Re-cap of the SaaShr Conference

The SaaShr’s 5th Annual Partner Community Workshop was held in Philadelphia, PA on September 19-21, 2012.  BrightLine Principal, Scott Zelko and I (Chief Marketing Officer, Avani Desai) attended as the Diamond Sponsor of the event.  The conference was attended by over 150 SaaShr customers and business partners.   SaaShr, a Kronos Company, is a provider of Software as a Service (SaaS)-based workforce management applications with a major focus in Human Resources (HR), Payroll, and Time and Labor Management.  The conference had several content-packed sessions which focused on implementation, support, sales, and marketing strategies, and new this year, emerging topic areas, such as social media use and regulatory / contractual compliance.

Wednesday marked the official start of the conference.  The conversation was lively as the attendees discussed with us various types of compliance reporting that they either perform or are being asked to perform; specifically SSAE 16 examinations.  The attendees were very interested in what could lie ahead in their industry, which they described as an environment that is compliance heavy, under continuous scrutiny and intertwined with customer, business partner, and legislative requirements.  We discussed some of the benefits of compliance reporting – meeting customer audit and compliance requirements, forging business partnerships, building trust with current customers, third party assurance, and competitive advantage. The attendees agreed and a CEO of an HR Service Bureau commented “An unqualified SSAE 16 report allowed our company, a small player in the market, to compete in the field with some very larger competitors.”

One of the highlights of the conference was when I had a chance to speak to the attendees during the Sponsor Circle.  I discussed that companies today increasingly rely on the services of outsourced providers to perform certain tasks or functions related to their business.  This is evident in the growth that the attendees have seen in their own companies – an average of over 10% annually.  However, the inherent risk a user organization assumes in outsourcing business functionality is the dependence on the service organization’s capability to deliver services.  I mentioned one efficient way for user organizations to get comfort and help mitigate these risks, is require service organizations to obtain third-party assurance concerning their internal control environment.  Accordingly, service organizations should get ahead of the curve and be proactive by preparing for the assurance reports before they are asked.  This resonated well with the attendees, as they thought about supplementary ways to compete in the market.

As the conference wrapped up, my favorite quote was made by an attendee who stopped by the BrightLine booth and asked questions about our services.  I mentioned SSAE 16, and he immediately said, “I need to get one of those Sassy 16’s done –the report knows it adds value, it is inevitable in today’s environment, it can help me grow, and also mitigate risk, so it has the right to throw a little bit of attitude around.”  Point well taken.

 

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Cloud Security Compliance – A Beautiful Mess

The following is a summary of thoughts based on an enthusiastic exchange at the Atlanta Chapter CSA Meeting on January 20th and was attended by BrightLine Shareholder Ryan Buckner.

First of all, I would like to say thank you to the host and the moderator for a truly fine job of creating this forum and to the attendees for their various perspectives.  The conference participants ran the gamut, and I was pleased to see representation from attorneys, accountants, consultants, and service providers.  As one would expect from the sizable audience, especially one with IT professionals, the conference demonstrated that the challenges the cloud community faces can be messy, but the conversations they spurn can be interesting and honest, and well …beautiful.

Much of the meeting brought to mind the old saying that “it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”  Our meeting was filled with various types of stakeholders, each with their own hammer.  The problem is that nobody seems to know if the problem is a nail.  As a practicing CPA and CISSP that manages over 100 SOC projects a year, I attempted to help provide clarity to the participants on SOC reporting topics.  There is still much work to be done in this area.  Others probably felt the same way about their respective “hammers”.

It felt premature to discuss solutions without the proper working groups.  I am also concerned that existing CSA research and guidance has not been given proper consideration.  If so, it would be pointless to waste time re-inventing CSA’s wheel or drafting solutions that are not in line with the general trajectory of CSA’s plans.

There was a healthy discussion on the usual compliance suspects with particular attention to the AICPA’s SOC reporting framework.  Although many seemed to have an opinion on this topic, I can report from the front lines that SOC 1 for cloud providers is prevalent and will remain that way so long as customers demand it.  My guess is that SOC 2 examinations make up less than 1% of all SOC examinations performed to date.  For that reason, I would be hesitant to hang my hat on it at this time.  But in a broader sense, I’m not convinced that the accounting industry should be the first place we look for solutions anyway.

Hopefully my contributions were helpful.  Certainly, the challenges are of the sort where more communication is probably better, and competence is a necessity.  It is clear the cloud community needs continued awareness, education, and sound guidance on these issues, and given that, the host’s efforts today are certainly part of the solution.  I was glad to attend, and look forward to the next discussion.

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