What is the primary focus of SOC 1?

The primary focus of SOC 1 is on internal controls relevant to an audit of financial statements. This type of audit reports specifically address the controls at a service organization that are likely to be relevant to an organization's financial reporting. SOC 1 reports are utilized by external auditors to obtain an understanding of the controls in place that might affect the financial statements of the user organizations. These reports serve to give stakeholders confidence that the financial data being reported is accurate and reliable.

In contrast, while control objectives within financial management and operational efficiencies within an organization are important, they do not capture the essence of SOC 1's focus, which is strictly on information that could impact financial statements. Additionally, regulatory compliance for federal agencies may be covered under other SOC reports or compliance frameworks but does not pertain specifically to the internal controls over financial reporting that SOC 1 emphasizes.