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In the latest episode of GRC Uncensored, hosts Troy Fine, Kendra Cooley, and producer Elliot Volkman open the floor to a much-needed conversation with Joseph Kirkpatrick, founder and president of Kirkpatrick Price. Joseph shares his perspective on everything ranging from SOC 2 in a box to low-quality audits and how his practice is standing firm against the factors weighing the GRC industry down.
SOC in a Box: Market Shifts and Consequences
We start off with Joseph talking about the increased prevalence of SOC in a Box platform and how they are impacting GRC. These platforms, often backed by private equity, promise streamlined and automated audit processes. While in some cases this is true, companies that are new to compliance are using platforms as shortcuts and often miss out on the intent behind the motion.
However, Joseph argues that while these tools can help organize data, they often fail to deliver the depth and thoroughness required for a quality audit. The influx of marketing dollars from such platforms often overshadows smaller CPA firms, shifting client focus away from traditional, more thorough approaches.
Advertising's Powerful Influence
Joseph elaborates on the role of advertising in shaping perceptions about SOC 2 audits. He draws parallels with other industries, illustrating how significant marketing funds can change market dynamics, sometimes at the quality's expense. Despite promising automation and ease, many of these compliance tools can't completely cover the complexities of a full audit, often necessitating human oversight and traditional auditing skills.
We also critiqued the prevalent notion that audits can be simplified to a series of checkmarks in a compliance tool. Joseph stressed the importance of understanding the client's specific environment and processes, which automated tools may miss. His firm prides itself on in-depth evaluations that go beyond surface-level checks, an approach often undervalued by SOC 2 automation pitches.
The Reality of Market Demands
Elliot acknowledges the allure of these cost-effective and time-efficient audit options, especially for companies under financial pressure. As we discussed in previous episodes, there is a reason behind these shifts, and a lot of it can be connected to market demands.
However, the conversation circles back to the crux of the matter—auditing integrity. Joseph raises concerns about the independence issues that arise when audit firms partner too closely with compliance platforms, potentially tainting objectivity.
Lessons on Integrity and Independence
Throughout the episode, Joseph advocates for maintaining high auditing standards and ethical practices. He encourages fellow practitioners to resist compromising integrity for financial gain. By focusing on quality over quantity, audit firms can solidify their reputations and provide genuine value to clients seeking thorough audits.
The episode ended with reflections on the need for continuous education and advocacy for high-quality auditing practices. Despite the challenges posed by market dynamics and compliance automation, practitioners like Joseph remain hopeful, emphasizing that each quality audit contributes to elevating industry standards.
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