SAS 70 (Statement on Auditing Standards 70) was an auditing framework for assessing service organizations’ controls, replaced by SSAE 18 in 2017. While obsolete, some hosting providers still reference SAS 70 compliance to demonstrate historical adherence to security protocols. Modern equivalents include SOC 2 and ISO 27001, which address evolving cloud infrastructure risks and data privacy requirements.
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Why Was SAS 70 Created for Service Organizations?
SAS 70 emerged in 1992 to standardize audits of third-party vendors handling financial data. It ensured companies could verify partners’ internal controls, particularly for SOX (Sarbanes-Oxley) compliance. Hosting providers adopted SAS 70 to reassure clients about data security, though its focus on financial reporting left gaps in broader cybersecurity assessment.
The standard initially helped bridge the trust gap between enterprises and external data processors during early internet adoption. Its creation coincided with the rise of outsourced IT services, providing a baseline for evaluating controls around financial reporting systems. However, the framework’s industry-specific limitations became apparent as cloud computing expanded beyond basic data storage into complex SaaS models requiring real-time security validation.
How Do SOC Reports Improve Upon SAS 70 Frameworks?
The AICPA’s SOC (System and Organization Controls) reports introduced three tiers:
- SOC 1: Financial reporting controls (SSAE 18)
- SOC 2: Security, availability, processing integrity (TSC criteria)
- SOC 3: General-use trust reports
Unlike SAS 70’s binary compliance, SOC 2 provides granular scoring across 60+ control points, with mandatory annual audits and real-time anomaly detection requirements for cloud hosts.
SOC frameworks address modern hosting challenges through continuous monitoring capabilities absent in SAS 70. Where SAS 70 offered snapshots of controls at audit time, SOC 2 Type II requires 6-12 months of continuous operation data. This shift enables detection of seasonal vulnerabilities and infrastructure stress patterns. Leading cloud providers now integrate SOC 2 requirements into their service level agreements, with 78% of managed service providers offering automated compliance reporting dashboards as of 2023.
| Feature | SAS 70 | SOC 2 |
|---|---|---|
| Audit Frequency | Annual | Continuous |
| Control Categories | 5 | 60+ |
| Cloud Coverage | Limited | Comprehensive |
Which Industries Still Require SAS 70 Documentation?
Legacy systems in healthcare (HIPAA), financial services (GLBA), and government contracting may demand SAS 70 reports for:
- Legacy application hosting
- Data migration projects
- Regulatory grandfather clauses
However, 92% of Fortune 500 companies now require SOC 2 compliance for new vendor contracts according to 2023 Deloitte cloud adoption surveys.
Specific verticals maintaining SAS 70 requirements typically involve legacy mainframe systems or long-term service contracts predating 2017. Financial institutions managing mergers often need SAS 70 documentation to validate historical data handling during asset transfers. Healthcare providers maintaining on-premise EHR systems may reference SAS 70 in continuity plans, though CMS now mandates SOC 2 for new cloud-based health information exchanges. Government entities show the highest SAS 70 utilization at 34%, primarily for auditing legacy infrastructure upgrades under existing procurement agreements.
| Industry | SAS 70 Usage | Modern Alternative |
|---|---|---|
| Banking | 21% | SOC 1 |
| Healthcare | 18% | SOC 2 + HIPAA |
| Government | 34% | FedRAMP |
Expert Views
“While SAS 70 laid crucial groundwork, its static nature can’t keep pace with zero-trust architectures,” notes Michael Tran, Cloud Compliance Director at HostSecure. “Modern hosting demands continuous control validation through automated SOC 2 monitoring tools that update compliance status in real-time across global edge networks.”
FAQs
- Q: Can SAS 70 reports satisfy current PCI DSS requirements?
- A: No. PCI DSS 4.0 explicitly requires SOC 2 or ISO 27001 documentation since 2022.
- Q: How long are SAS 70 audit reports valid?
- A: Most regulatory bodies stopped recognizing SAS 70 after December 15, 2017.
- Q: Does SAS 70 cover disaster recovery testing?
- A: Only at surface level. SOC 2 requires semi-annual DR drills with full infrastructure failover simulations.