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How Is Your Company Protecting Against Vendor Risk?

As corporate outsourcing grows, so does the need for due diligence in the supply chain.

The risks of outsourcing

The risks to business continuity and reputation seem to be growing each day. Now take those risks and multiply them by all the businesses that your company relies on for its daily operations – dozens or even hundreds of suppliers.

Outsourcing often increases strategic efficiency, but as your vendor ecosystem grows, so do the risks, as the disruption suffered by one provider could have a cascading effect on the rest of your business.

In today’s complex supply chain environment, there’s a growing need for independent specialists to provide assurance that vendors have the proper controls in place. It’s a natural role for auditors, many of whom can now analyze virtually any business system through a System and Organization Control report, or SOC report for short.

Click here for an infographic of the different types of SOC reports.

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“The business risks related to digitalization and outsourcing continue to increase. A SOC report is one way to identify the risks as well as the controls in place. It provides a transparent understanding of which risks you’ve chosen to outsource, and it’s a generally accepted standard that outsourcing organizations use to meet the requirements of customers, stakeholders or regulators.”

- Heather Paquette, National Technology Assurance Leader, Audit, KPMG US

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Image of Heather Paquette
Heather Paquette
National Technology Assurance Leader – Audit, KPMG US
Image of Bernie Weiger
Bernie Weiger
Technology Assurance – Audit Partner, KPMG US

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