Navigating SOC Audits and AI Compliance: A Dual Perspective

Implementing AI with your business’ data security in mind

In today’s rapidly evolving technological landscape, the integration of artificial intelligence (AI) is becoming increasingly essential for organizations to stay competitive. However, the rush to adopt AI without proper security checks can lead to significant vulnerabilities.  AI creates unique considerations for System and Organization Controls (SOC) audits, both from the user’s and the AI provider’s perspective.

The user’s perspective

AI is a megatrend and not implementing it in your business could mean falling behind your competitors. However, unlike traditional software purchases that undergo a thorough vendor review process before testing and deployment, AI’s accessibility and sense of urgency often lead to hasty implementations. Because AI service providers may be ingesting highly sensitive data, organizations must thoroughly vet the security implemented by the AI service provider prior to allowing them access to company data. This is particularly vital in industries like finance, healthcare, and e-commerce, where sensitive data is prevalent.

Obtaining and reviewing SOC reports or equivalent assurances from AI service providers is a crucial first step in this process. However, the AI vendor’s security is only half the security battle. Your organization’s security plays a vital role as well. Some organization considerations include:

• Preventing unauthorized AI services: Establish safeguards to prevent employees from entering company data into unauthorized AI products. This can be achieved through clearly communicated policies and security configurations.
• Limiting the data to which the AI has access: An AI without boundaries will index and train itself on all the data it has access to. For example, an AI may train on the entire company network, and if blocks are not put in place to prevent non-human resource (HR) staff from accessing sensitive data, this training may include accessing the HR folders. With that data now part of the AI’s data set, one employee could ask the AI about another employee’s salary, performance ratings, or other personally identifiable information.
• Carefully considering user entity controls: If your AI service provider obtains a SOC audit, they are required to disclose complimentary user entity controls (CUECs) and may also include user entity responsibilities. These disclosures provide critical information about your role in the security of your data as you use their service. Evaluate this information in detail and consider implementing any missing CUECs and user entity responsibilities.

The provider’s perspective

The criteria that forms the basis of a SOC report is published by the AICPA and is called the Trust Services Criteria (TSC). The title of the criteria itself emphasizes the inherent trust that must be given by the user to the service provider. AI service providers handle highly sensitive customer data and therefore ask for a lot of trust. Undergoing the rigors of a SOC audit is a critical step in demonstrating their trustworthiness.

A SOC report contains a detailed “description” of an organization’s entity-level controls as well as lower-level, security-oriented controls. This combination demonstrates that not only are there effective technical security controls in place, but there is also formalized organizational commitment that helps ensure they continue to operate and adapt to new risks. The description should contain adequate detail to satisfy sophisticated clients.

A SOC auditor’s responsibility is to perform adequate audit procedures to formulate an opinion on a company’s effective implementation, design, and operation of the internal controls disclosed in the description. The rigor required to undergo a SOC audit and issue a SOC report are the foundation for the trust it builds with clients and the enhancement to organization’s reputation in the market, including prospective customers.

In previous articles, we discussed the process of obtaining a SOC audit. These articles provide valuable insights into the steps involved, from initial assessment to final report issuance. By following these guidelines, service providers can ensure they meet the highest standards of data security and compliance.

Build and maintain trust

Both users and providers of AI have extensive security obligations. Although their perspectives are different, SOC reports play a foundational role in building and maintaining trust. Contact our Keiter Technologies team today to learn how we can help your business mitigate cybersecurity risks. Email or call 804.747.0000.