SOC 2 CC4.2: COSO Principle 17: Evaluates and Communicates Deficiencies

Set up a formal deficiency management process. Define severity classification criteria (critical, high, medium, low), remediation timelines for each level, escalation paths for overdue items, and requirements for verifying that fixes actually work. Put a deficiency tracking system in place. A GRC platform, ticketing system, or even a well-maintained spreadsheet will work, but it must give you visibility into all open deficiencies, their status, assigned owners, and target dates. This system is the single source of truth regardless of where the deficiency originated. Define who gets told about what. Critical and high-severity deficiencies should reach senior management and the board (or audit committee) within days. Medium and low items go into periodic reports - monthly or quarterly. Use a standard reporting format that conveys the nature of the issue, its risk impact, and remediation progress. Assign a clear owner for every deficiency. The owner should be someone with the authority and ability to fix the problem, not just the person who spotted it. Build accountability for meeting deadlines and include deficiency status in regular management reviews. Verify before closing. After corrective action is taken, an independent party should confirm the fix is effective and that the root cause has been addressed. Premature closure is a common trap that auditors will catch on the next cycle. Periodically review the deficiency management process itself. Analyse trends in deficiency types, sources, and resolution times. Use that analysis to identify systemic weaknesses and improve how you handle issues over time.