Benfits of Partnering with Valor

Discover the benefits of partnering with Valor for expert mineral management services

At Valor, we are dedicated to delivering exceptional mineral management services that optimize your operations and enhance profitability, leveraging our expertise to provide you with unparalleled support and strategic solutions. Benefits include:

  • mineral.tech® proprietary software
  • Our software is constantly being updated and optimized to ensure it evolves with our client’s needs and does not become stagnant. Our proprietary mineral management software supports royalty tracking and provides real-time royalty reporting, asset visualization and accounting reports.
  • More than a SaaS company
  • We do all the work for you, from onboarding to proactively managing all mineral assets. Unlike other providers, we don’t simply onboard your assets and leave them static; at Valor, we proactively manage all mineral assets, actively digging deeper with dedicated teams focused on resolving any issues (ex: suspended funds), ensuring comprehensive and continuous oversight from start to finish.
  • Industry experts
  • We were founded by multi-generational oil and gas professionals & have a dynamic team with diverse expertise to meet your mineral management needs. Our team includes data analysts, in-house landmen, full-time accounting professionals, CPAs and full-time land professionals, including CPLs, CPLTA, CMMs, JD, and CTFA.
  • Saved time
  • Our goal is to allow our clients to spend time focused on their core business operations, not the day-to-day nuances of mineral management.
  • Peace of Mind
  • Clients can have peace of mind knowing that their assets are being managed by professionals who are committed to maximizing their value and ensuring all administrative tasks are handled accurately and efficiently.

Partnering with Valor offers a strategic advantage that goes beyond conventional mineral management services. Our expertise, tailored solutions, and commitment to excellence ensure that every aspect of your operations is optimized for success. With Valor, you gain a partner that is not just a service provider, but a key player in your mission to achieve greater efficiency, compliance, and profitability in the competitive landscape of the oil and gas industry.

Contact Valor Today

Contact us today if you need managing minerals support.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Understanding the True Value of Your Mineral Assets

For many mineral owners, understanding the true worth of their assets can be a daunting task. This challenge is particularly acute for those who have inherited mineral rights, as they may not be fully aware of the potential value locked within these assets. Whether you are seasoned in the world of mineral transactions or new to the nuances of mineral rights, recognizing the importance of these assets is crucial.

The Complexity of Mineral Rights Valuation

Mineral rights are not just another piece of property. They represent a potential ongoing income through royalties, bonuses, and other payments tied to the extraction and sale of natural resources. Unlike real estate, the value of mineral rights can fluctuate dramatically based on market conditions, regulatory changes, and technological advancements in extraction methods.

For those who inherit these rights, the sudden ownership of such potentially valuable assets can come with a host of questions: What are they really worth? Is now the right time to sell? How do I evaluate an offer?

The Risk of Rushed Decisions

It’s not uncommon for mineral owners, particularly those who are new to such assets, to receive unsolicited purchase offers. These offers can be tempting, especially if they come during times of financial need or when the market is peaking. However, rushing into a sale without a proper understanding of the value of your mineral rights can lead to regrettable decisions. Selling your rights without thorough evaluation often results in receiving far less than what your assets are truly worth.

How Valor Helps

At Valor, we understand the complexities involved in managing and valuing mineral rights. That’s why we provide our clients not just with expert valuation services, but with continuous support that makes navigating these decisions easier.

Working with Valor means having a partner that is committed to ensuring you receive the maximum value for your mineral rights. Our expertise in the oil and gas industry, coupled with our dedication to client education, empowers mineral owners to make informed decisions that best serve their financial interests. Whether you’re contemplating a sale or simply seeking to understand the full potential of your assets, Valor is here to guide you every step of the way.

Contact Valor Today

Contact us today if you need support with oil & gas lease negotiation.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Unlock the Future by Digitizing the Past with Valor

In the age of digital transformation, the way we handle and preserve historical records is evolving. At Valor, we specialize in converting your physical files into digital formats, offering a streamlined and secure solution to manage your invaluable documents.

Many of our clients have found themselves overwhelmed with physical documents—ranging from essential title documents and deeds to tax records and more, stored in boxes, entire rooms, or even off-site storage units. Valor’s dedicated team is here to change that. We scan, organize and digitally store all your historical paperwork, transforming your physical archives into a neatly organized digital library.

Why Go Digital? Here are a few compelling reasons:

  1. Accessibility: Digitize your documents and gain the ability to access them anytime, anywhere. Whether you’re in the office or on the go, your records are just a few clicks away.
  2. Safety and Security: Paper is vulnerable to loss, damage, and degradation. Digital documents are securely stored and backed up, protecting them from physical harm and ensuring they last for generations.
  3. Space Efficiency: Reclaim your office space! Digitizing records eliminates the need for physical storage, freeing up space and reducing clutter in your work environment.
  4. Disaster Recovery: In the event of a disaster, digital records can be quickly recovered, ensuring business continuity and security of information.
  5. Organizational Ease: With digital storage, sorting, searching, and managing documents becomes effortless. Custom organization and indexing mean that everything you need is at your fingertips, exactly how you want it.

At Valor, we are committed to ensuring that your transition to a digital archive is smooth and beneficial. Our process not only safeguards your documents but also enhances accessibility and efficiency.

About Valor

Valor is a specialty asset management services provider that serves mineral rights owners, and oil and gas operators and investors. Valor offers mineral management services, including oil and gas accounting, land management, ownership verification and correction and lease negotiation and counsel. They created their proprietary mineral management software, mineral.tech®, to provide security, clarity and revenue optimization for their individual and institutional clients. Valor is also a leading provider of oil and gas outsourcing services for operators, partnering with companies to offer owner relations support, oil and gas accounting, regulatory compliance, and other back-office operations.

Contact Valor Today

Contact us today to learn more about how we can preserve your historical documents and better prepare you for the future.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Why Outsourcing Makes Sense for Operators

Maximize Efficiency with Valor: Your Outsourcing Partner in the Oil and Gas Industry

In the world of oil and gas operations, the pace of business can vary dramatically—buying or selling wells, ramping up exploration, or navigating through quieter periods. This fluctuation often necessitates a flexible approach to internal operations, a challenge that can be efficiently met through strategic outsourcing.

At Valor, we understand that the cyclical nature of the oil and gas industry demands agility and scalability, qualities at the core of Valor’s oil and gas outsourcing services. Our team is adept at adapting to your business’s ever-changing needs, ensuring that you have the right support at the right time, without the burden of hiring and firing internal staff. This flexibility is crucial not only for managing day-to-day operations but also during peak periods such as tax season or regulatory compliance deadlines.

Services Tailored to Your Needs

Valor offers a comprehensive range of services tailored to the unique needs of oil and gas operators:

  • Oil and Gas Accounting: From daily financial operations to complex fiscal reporting, our accounting experts ensure accuracy and compliance. We manage AP, financial and operational reporting, production reporting and revenue data entry and distribution.
  • Owner Relations: We help you maintain excellent relationships with stakeholders, ensuring communication is clear and professional. Additionally, we research owners that cannot be found.
  • Joint Interest Billing (JIB): Our specialists handle the complexities of joint interest billing, reducing errors and disputes.
  • Division Orders: We manage the details of division orders to ensure that revenue distribution is handled efficiently and accurately.
  • Regulatory Compliance: Stay compliant with industry regulations without the headache of keeping track of ever-changing legal requirements.

Why Choose Valor?

Choosing Valor means partnering with a team that brings deep industry expertise and a commitment to your success. Outsourcing with us allows you to:

  • Scale Operations Efficiently: Expand or reduce support in line with your operational activities and market conditions.
  • Reduce Operational Costs: Eliminate the overhead associated with recruiting, hiring, and training staff.
  • Focus on Core Activities: Free up your internal resources to focus on core business activities, while we handle the complexities of day-to-day operations.

In a sector where timing and expertise are critical, letting Valor handle your operational needs means you’re always ready for what’s next, without the overhead and hassle of managing additional employees. Let our team of experts be your competitive advantage.

Contact Valor Today

Contact us today to learn more about our oil and gas outsourcing solutions.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor Employee Spotlight | Hillari Rawls

Welcome to our Valor Employee Spotlight series! In this edition, we’re thrilled to introduce Hillari Rawls, Accounting Manager. Hillari is a vital member of the Valor family and we can’t wait for you to learn more about her!

Background and Experience

Hillari began her academic journey at Abilene Christian University, later earning a Bachelor of Business Administration and a Master of Professional Accountancy (M.P.Ac.) from Angelo State University, where she maintained a 4.0 GPA. While at Angelo State, Rawls distinguished herself as a scholar-athlete, playing basketball and earning the title of 2014 Lone Star Conference Academic Player of the Year. She achieved her certification as a public accountant (CPA) in 2017 and is an active member of the American Institute of Certified Public Accountants (AICPA). Her professional career includes roles such as senior fund accountant and accounting manager at Varagon Capital Partners, a firm specializing in asset management lending for middle-market companies. She has also managed various accounting and analyst responsibilities at BNY Mellon, Oak Hill Advisors, and Whitley Penn. In addition to her professional pursuits, Rawls is committed to her community, participating in numerous charitable campaigns with the Red Shoe Society of Fort Worth.

Role at Valor

In her role at Valor, Hillari is integral to the financial operations for various operator clients. She is responsible for processing accounts payable (A/P), joint interest billings (JIBs), and revenue on a monthly basis. Her attention to detail and comprehensive understanding of accountancy ensure accurate and timely financial reporting, supporting the overall financial health and compliance of the operator clients she serves.

Hillari’s Favorites

Outside the Office
Outside the office, Hillari likes to spend time with her husband and two sons. She enjoys watching sports, especially basketball and football.

Favorite Drink/Food
One of Hillari’s favorite things to do is to explore and try new restaurants in and around Fort Worth.

What Hillari Loves Most About Valor

“What I love most about Valor is the team I work with and the flexibility the company provides. This flexibility is essential for me, especially with two young boys. It truly makes balancing professional and personal life much more manageable.”

Hillari is a remarkable example of the talent we have here at Valor. Stay tuned for more employee spotlights to learn about the incredible individuals who make Valor a great place to work!

Valor: Your Partner in Asset Management Services

At Valor, we stand at the forefront of specialty asset management, dedicated to empowering mineral rights owners, oil and gas operators, and investors. Our comprehensive suite of oil and gas outsourcing services and innovative approaches are tailored to enhance security, clarity, and revenue optimization for both individual and institutional clients.

Who We Are

Valor is comprised of a team of multigenerational oil and gas experts and industry pioneers, each with experience across various industry sectors. We are well-versed in the complexities of oil and gas assets and the meticulous management they require to deliver favorable results for our clients. Our mineral management and outsourcing solutions are crafted to address the specific challenges our clients face every day. We strive to be more than just a service provider; instead your partner in financial and operational success.

Celebrated Success

Since our inception, Valor has been recognized with numerous accolades across various dimensions of our industry and corporate culture. We are grateful for these acknowledgments, which include prestigious awards for our rapid growth, like making the Inc. 5000 list and being named among Inc. Magazine’s Fastest-Growing Private Companies in the Southwest Region for 2023 and 2024. Our growth has also been spotlighted by Clutch as one of the 100 Fastest Growing Companies, and by the Financial Times as one of The Americas’ Fastest-Growing Companies in 2024. On the cultural front, we’ve been honored by Fort Worth Inc. as one of the Best Companies to Work for in Fort Worth for 2022 and 2023, recognized globally and in North America by Inspiring Workplaces™, and our CEO has been celebrated as an Inspiring Leader. Moreover, our finance team has been acknowledged for its innovation by D CEO, and we’ve received a Gold Stevie® Award from the American Business Awards® as the Financial Services Company of the Year. Additionally, Hart Energy has honored our president as a promising young leaders with the 40 under 40 Award, presented by Oil & Gas Investor Magazine. These awards are a testament to our team’s dedication and drive to excel, reflecting our deep commitment to providing exceptional service and innovative solutions to our clients.

For a full list of awards, click here.

Our Services

Our expertise spans across crucial areas such as mineral management, oil and gas accounting, land management, regulatory compliance and lease negotiation and counsel. With a robust foundation in these disciplines, we ensure that all your asset management needs can be met with one trusted provider.

Comprehensive Mineral Management Services

Our Mineral Management Department is the core of our operations, where we offer a wide array of services to manage, grow, and safeguard your assets:

  • Streamlined Accounting Services: Accurate and timely financial records.
  • Digital Document Management: Secure and accessible document storage.
  • Public Activity and Offset Drilling Tracking: Stay updated with industry movements.
  • Ownership Verification & Correction: Ensuring your records are precise.
  • Negotiation Council & Execution: Expert support in all your negotiation needs.
  • Proprietary Software Access: Exclusive access to our mineral.tech® software.
  • Financial Reporting and 24/7 Asset Reporting: Comprehensive insights into your assets.
  • Joint Interest Billing (JIB) and Division Order Processing: Efficient handling of critical billing and order processes.
  • Contract Analysis and Asset Preparation for the Next Generation: Preparing your estate for future transitions.
  • Property Tax Audit and 1099 Review: Critical evaluations for compliance and accuracy.
  • Mail Services and Custom Solutions: Tailored services to fit your unique needs.

Comprehensive Outsourcing Solutions

At Valor, we recognize the critical importance of efficient back-office operations in driving business success. Our oil and gas outsourcing D\department is specifically designed to support oil and gas operators and investors by handling the complex, day-to-day administrative tasks that are essential yet time-consuming. Our services in this area include:

Accounts Payable (AP) and Receivable (AR): Managing incoming and outgoing financial transactions meticulously.
Financial and Operational Reporting: Delivering detailed reports for better decision-making.
Production Reporting: Providing accurate updates on production status to optimize operations.
Revenue Data Entry and Revenue Processing: Ensuring all revenue transactions are recorded accurately and processed efficiently.
Joint Interest Billing (JIB): Handling billing associated with joint venture partnerships.
Authorizations for Expenditures (AFE) and Transactional Services: Facilitating the approval of capital expenditures and managing transactional operations.
Regulatory Compliance: Ensuring all operations comply with relevant laws and regulations to avoid penalties and disruptions.
DOI & Suspense Maintenance: Managing division of interest (DOI) and suspense accounts to ensure proper revenue distribution.
Vendor & Owner Information Management: Keeping vendor and owner records up-to-date for seamless operations.
W-9 Maintenance: Ensuring tax information for vendors and partners is current and compliant.
Revenue & Royalty Distributions: Efficiently processing payments to ensure timely and accurate distributions.
Lease Operating Statements: Preparing detailed statements that provide insights into the financial performance of lease operations.

Our Reputation

At Valor, nothing is more rewarding than hearing from our clients about the positive impact we’ve had on their operations and lives. The trust our clients place in us to manage such valuable assets is not just a professional responsibility—it’s a privilege. Knowing that our services genuinely enhance the financial and operational well-being of those we serve fuels our commitment to excellence and drives us to continuously improve and innovate in all that we do.

To read some of the kind words our clients have shared with us, click here.

Why Choose Valor?

Choosing Valor means opting for a partner who understands the intricacies of your assets and is equipped to handle its challenges. Whether you’re navigating the complexities of mineral rights or streamlining oil and gas operations, our team is here to propel you toward your goals with strategic expertise and innovative solutions.

Contact

Contact us today and let us get to work managing your oil and gas assets.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Streamlined Mail Services for Your Minerals

Simplify Your Mineral Management with Valor’s Comprehensive Mail Services

Managing mineral rights and assets involves a considerable amount of paperwork and financial transactions that can be overwhelming. At Valor, we understand the intricacies involved in mineral management, and we’re here to simplify the process for you. Our full suite of mail services is designed to handle every aspect of your mineral asset management, allowing you to step back from the day-to-day tasks associated with these interests.

Valor’s Mail Services Include:

  1. Check Receipt and Deposit: Handling checks can be time-consuming. Valor will take care of reviewing and depositing all checks received on your behalf. We record all income information and ensure funds are deposited into your preferred accounts, saving you time and hassle.
  2. Pay and Process Joint Interest Billings (JIBs): Our experienced accountants specialize in JIB accounting. Valor will meticulously receive, review, and pay JIBs related to all your working interests, ensuring accuracy and timely management of your financial obligations.
  3. Digitization of All Existing Paperwork: If your file cabinets are overflowing with essential paperwork that you can’t discard, Valor’s digitization services come to the rescue. We will scan and digitally store all historical documents, organizing them to your specifications, making them easily accessible whenever you need them.
  4. Division Order Management: Valor employs skilled Division Order Analysts who focus on resolving issues for mineral and royalty owners. Our team handles everything from chasing payments for non-producing wells to discovering new wells you should be compensated from, setting up direct deposits, and ensuring you receive timely and accurate payments.
  5. Property Tax Review and Payment: We take your property taxes seriously. Our team reviews your property tax statements to verify their accuracy, protecting you from overpaying due to errors or being taxed on properties you do not own. This diligence ensures you only pay what you rightfully owe.

If you wish to remove yourself from the day-to-day burden of mineral management, Valor is here to support you. Let us handle the complexities of mineral rights management while you enjoy the benefits of your investments.

Contact Valor Today

Contact us today to learn more about how our services can be tailored to meet your specific needs.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Importance of Cloud-Based Mineral Management

The oil and gas industry is continuing to undergo optimizations and advancements, largely driven by technology. Among these, cloud-based solutions are increasingly vital, particularly in the realm of mineral management. These mineral management platforms are revolutionizing how mineral owners track, manage, and optimize their assets.

Real-Time Data Access Anywhere, Anytime

In today’s fast-paced market, the ability to access data in real-time from anywhere in the world is not just a convenience—it’s a necessity. Valor’s proprietary mineral management platform software, mineral.tech®, strived to be ahead of the game and was developed over five years ago. While it is continually updated and evolving, at its core it allows clients to access their mineral interest data 24/7, anywhere in the world. This capability ensures that Valor’s team and clients are always informed and can react promptly to changes in the market, operational conditions or flag inconsistencies and errors regarding payment.

Holistic Portfolio Management

Cloud-based platforms like mineral.tech® offer a comprehensive view of a company on individuals mineral assets. Stakeholders can obtain a holistic understanding of their portfolios, which facilitates more strategic decision-making. The mineral management platforms ability to drill down into detailed views of interests, tracts, units, and wells provides a granularity that was difficult to achieve with traditional management systems or outdated paper maps and paper filing systems. This level of detail is crucial for thorough asset management and strategic planning.

Tracking and Analysis

One of the most significant advantages of using a cloud-based mineral management system is the capability to track and analyze various financial aspects. Clients can monitor monthly revenue streams from working interests, lease operating expenses (LOE), and royalty revenue. Such tracking ensures that all financial records are up-to-date and accurate, aiding in better financial planning and compliance with regulatory requirements.

Benefits to Stakeholders

While we know it can be daunting to leave old ways of mineral management in the past, the transition to cloud-based solutions offers numerous benefits:

  • Efficiency Improvements: Automating data collection and processing reduces the need for manual entry, decreasing the likelihood of errors and increasing operational efficiency.
  • Scalability: Cloud platforms can be easily scaled up or down based on the needs of the individual or business, allowing for flexibility as interests owned and managed expand or contract.
  • Enhanced Security: Advanced security measures and data backups are standard features of reputable cloud-based solutions, such as mineral.tech®, ensuring that critical business data is protected against loss and hacking. Valor is proud to have achieved both a SOC 1 Type 1 and Type 2 audit and certification, further instilling confidence in our clients that their data and financial information are secure.

The shift towards cloud-based mineral management programs such as mineral.tech® is indicative of broader trends within the oil and gas industry toward digitization and operational efficiency. By adopting these modern technologies, companies not only streamline their operations but also gain strategic advantages in a competitive marketplace. This move is not just about keeping up with technology—it’s about staying ahead in a rapidly evolving industry.

By embracing cloud-based systems, the mineral management sector is setting a new standard for efficiency and strategic management, ensuring mineral owners and managers can make the most informed decisions for their financial and operational success.

Contact Valor Today

Contact us today to learn more about our mineral management platform solutions.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor Employee Spotlight | Jason Beck

Welcome to our Valor Employee Spotlight series! In this edition, we’re thrilled to introduce Jason Beck, Director of Mineral Management. Jason is a vital member of the Valor family and we can’t wait for you to learn more about him!

Background and Experience

Jason graduated from West Texas A&M University with a Bachelors Degree in Agricultural Business & Economics. He went on to continue his education by completing the Executive Education Program – Petroleum Land Management from Texas Christian University. He possesses over two decades of experience in the oil and gas industry and holds two certifications – Certified Professional Landman (CPL) and a Certified Trust and Financial Advisor (CTFA). Prior to working at Valor, Jason worked at Happy State Bank as their Assistant Vice President/Trust Officer and JPMorgan Chase as their Executive Director/Regional Manager Mineral Asset Management. In his role at JPMorgan Chase, Jason acted as the primary mineral manager for their trust, agency and foundation accounts holding oil, gas, and minerals assets. Jason’s experience in mineral management for banks perfectly equipped him to work with Valor’s various bank and foundation clients.

Role at Valor

In his role at Valor, Jason currently guides a mineral management team, aligning objectives with the organization’s strategy and ensuring optimized client deliverables. With his profound knowledge of land management, laws, regulations, contract negotiation, investments, data analysis and portfolio management, he has been hugely instrumental in helping Valor optimize their mineral management services and proprietary software, mineral.tech®. He is responsible for implementing stringent quality control measures in financial reporting and land management, ensuring compliance with both industry regulations and company policies. This role also involves leading process improvement initiatives that align with strategic objectives, aimed at enhancing organizational efficiency and effectiveness. Additionally, he is committed to the ongoing training and development of team members, continually enhancing their skills and knowledge to maintain high standards of performance.

Jason’s Favorites

Outside the Office
Outside the office, Jason enjoys spending time with his family, including his wife and two daughters. He also loves to spend time in the outdoors, whether it be skiing in the mountains, boating on the lake, hunting or fishing.

Favorite Drink/Food
The native Texan enjoys a good steak and a whiskey above all else.

What Jason Loves Most About Valor

“What I love most about Valor is the people and being part of an organization that not only grows rapidly but also continues to expand its services, employees, and clients. It’s awesome to see our progress and to be part of this.” – Jason Beck, Valor Director of Mineral Management.

Jason is a remarkable example of the talent we have here at Valor. Stay tuned for more employee spotlights to learn about the incredible individuals who make Valor a great place to work!

Valor SOC 1 Type 1 & 2 Certifications

In today’s digital age, where information security and data protection are paramount, organizations across the globe are increasingly required to demonstrate their commitment to these principles. One of the key ways businesses can showcase their adherence to high standards of security and data management is through a Service Organization Control (SOC) audit.

In a move to underscore our unwavering commitment to security, data protection, and client trust, Valor is proud to have successfully achieved both SOC 1 Type 1 and SOC 1 Type 2 audits and certifications. This milestone is a testament to the rigorous standards we uphold in managing our clients’ assets and the emphasis we place on maintaining a secure and trustworthy environment. Valor aims to provide our current and prospective clients with the highest level of assurance regarding our control environments. Achieving both Type 1 and Type 2 certifications not only demonstrates our capability to design effective controls but also affirms their operational effectiveness over time. It’s a clear indicator of the value we place on building and maintaining trust, showcasing our leadership in setting industry standards for data protection and client service.

But what exactly is a SOC audit, and how do SOC 1 Type 1 and SOC 1 Type 2 audits differ? Let’s dive into these questions to provide a better understanding.

What is a SOC Audit?

A SOC audit is a standardized procedure for evaluating the extent to which a service organization conducts its business in accordance with certain trust principles. These principles revolve around security, availability, processing integrity, confidentiality, and privacy of the system used to process users’ data. Conducted by independent auditors, SOC audits result in a report that provides valuable information regarding the effectiveness of a service organization’s controls related to these principles.

SOC audits are categorized into three types: SOC 1, SOC 2, and SOC 3, each serving different purposes and audiences. SOC 1 audits, specifically, focus on the controls at a service organization that may impact clients’ financial reporting. This type of audit is crucial for the service organization’s clients who need assurance about the security and processing integrity of the data managed by the service provider.

SOC 1 Type 1 vs. SOC 1 Type 2

When we talk about SOC 1 audits, it’s essential to understand the distinction between Type 1 and Type 2 reports, as they serve different objectives and offer varying levels of insight into the organization’s controls.

SOC 1 Type 1

A SOC 1 Type 1 audit is a snapshot of the service organization’s systems and the suitability of the design of its controls at a specific point in time. This type of report assesses whether the service organization’s controls are properly designed to achieve the desired objectives. However, it does not evaluate the effectiveness of these controls over a period of time. The main purpose of a SOC 1 Type 1 report is to provide assurance about the control design to the service organization’s clients and their auditors.

SOC 1 Type 2

In contrast, a SOC 1 Type 2 audit is more comprehensive. It not only assesses the suitability of the design of controls but also evaluates the operational effectiveness of those controls over a defined review period, typically no less than six months. This type of report provides an in-depth analysis of the service organization’s controls, including detailed testing of the controls’ effectiveness over time. A SOC 1 Type 2 report is particularly valuable for clients and their auditors because it offers assurance that the controls are not only appropriately designed, but also consistently applied.

Both SOC 1 Type 1 and SOC 1 Type 2 audits play crucial roles in the landscape of information security and financial reporting. While a Type 1 audit provides a snapshot of control design at a specific point in time, a Type 2 audit offers a more detailed and ongoing assessment of control effectiveness.


Contact Valor Today

Contact us today to learn more about our oil and gas outsourcing services.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.