third-party-assurance

Perspectives

Third-party assurance optimization

Value creation strategies for service providers

Outsource service providers are increasingly managing core business and IT processes for clients, which entails gaining unprecedented access to sensitive data and connectivity to critical systems. But when outsource service providers are more tightly integrated with day-to-day operations, they also have an impact on their clients’ internal control environments. Companies, therefore, are holding outsource service providers to the same level of risk monitoring and regulatory compliance that they hold themselves. As demand for third-party assurance reports increases, how can outsource service providers implement a more streamlined approach for dealing with both customer and regulatory requirements?

Easing the burden

Increased regulation and greater reliance on outsourcing has led to a proliferation of TPA reports, from the workhorse SOC 1 reports to Attestation (AT) 101, SOC 2, and Agreed-Upon Procedures (AUP) reports. There is also a wide range of industry-specific reports. And TPA reports will likely extend to other business-critical areas such as cybersecurity.

Outsource service providers (OSPs) are also often inundated with security questionnaires from individual clients, requests for customer-specific third-party assurance (TPA) reports, and demands to arrange for burdensome on-site client auditor visits that well-designed TPA programs should address. Combine this with the need for OSPs to meet their own internal compliance requirements, and it’s easy to see why they are looking for ways to ease the burden.

Third-party assurance leading practices

Conquering the problem of TPA report proliferation calls for a comprehensive approach that can streamline efforts and make the best use of an OSP’s resources.

Here are a few practices that can give OSPs a good head start:

  • Take stock: Create an inventory of internal and external control requirements to identify gaps and overlaps. Having an inventory allows you to map requirements against the controls that fulfill them and determine which ones you can cover through TPA reports. 
  • Get more bang for your buck: Once you have a catalog of requirements mapped to enterprise-wide controls, you’re in a position to capitalize on synergies and common elements to realize substantial efficiencies during control testing.
  • Shout it from the rooftops: Efficient TPA reporting is a valuable asset to customers, which are able to meet their own compliance requirements more quickly based on your rapid turnaround of requests. So it’s important to provide training and education for your salesforce, management, and other key personnel who can make customers aware of your TPA capabilities.
  • Practice spring cleaning: Regularly revisit your TPA requirements inventory, adopt a continuous improvement mindset, and be proactive about uncovering—and then meeting—customer needs.

Staying on top of third-party assurance reporting

As companies step up their use of outsourcers for the management of mission-critical operations and business processes, demand for TPA reporting is certain to increase. These reports can be complex, and every customer has different requirements. To stay on top of it all, make the best use of limited resources, and move your organization from merely protecting value to actually creating it, you need a big-picture view of your environment.

With an enterprise-wide inventory of controls mapped to both internal and external requirements, you can be better positioned to efficiently and effectively deliver the level of comfort that your customers need from members of their extended enterprise.

To learn more, download our Third-party assurance optimization report or visit our Third-party assurance services page. 

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