User entity control considerations

“User entity control considerations” is one of the fastest ways to fail a SOC 1 readiness effort without realizing it. Your controls can be well-designed and operating, but if the customer must do something specific (for example, restrict who can approve payments, review exception reports, or reconcile outputs), that dependency must be explicitly stated as a complementary user entity control (CUEC). If you don’t define and communicate those expectations, user entities may assume you cover the whole control chain, and auditors may conclude your control objectives are not achievable as described.

Operationally, treat this requirement as a boundary-management exercise: where your responsibility ends, where the customer’s begins, and what shared processes require coordination. The output is not a theoretical statement. It is a set of crisp, testable customer actions that directly support your SOC 1 control objectives, written in language a controller, AP manager, payroll lead, or IT admin can actually execute.

This page gives you requirement-level steps, evidence to retain, and common audit questions so you can implement quickly and defend your approach during SOC 1 examinations. Source basis: AICPA SOC 1 overview (AICPA SOC 1 overview).

Regulatory text

SOC 1 requirement (excerpt): “Define complementary user entity controls and communication expectations.” ¹

What the operator must do

1. Define complementary user entity controls (CUECs) for each relevant control objective: the actions the user entity must perform so your controls achieve the intended outcome.
2. Define communication expectations: where CUECs are documented, how customers receive them, how updates are communicated, and who owns customer communication.
3. Maintain evidence that CUECs are current, approved, and distributed to the user entities who rely on the SOC 1 report.

Plain-English interpretation (what this means in practice)

Your SOC 1 description and controls cannot assume customers “just know” what they must do. If your service produces financial reporting data, routes transactions, calculates payroll, supports billing, or hosts systems that affect financial statements, your customers often have to configure something, approve something, review something, or reconcile something. Those customer actions are part of the control chain.

A workable CUEC statement has three properties:

• Specific: names the customer action and outcome (not “maintain strong security”).
• Scoped: tied to an in-scope service and control objective.
• Testable: an auditor could verify whether the customer did it.

Who it applies to

Entities

• Service organizations issuing (or preparing to issue) SOC 1 Type 1 or Type 2 reports ¹.

Operational contexts where CUECs matter most

• Financial transaction processing (payments, billing, claims, trading, lending support)
• Payroll and benefits administration
• Revenue recognition support systems
• ERP integrations and data pipelines that feed general ledger postings
• Managed services where the customer retains approval, reconciliation, or exception handling responsibilities

If you provide “tools” and the customer runs the business process, you will almost always have CUECs.

What you actually need to do (step-by-step)

Step 1: Define service boundaries and “control chain” dependencies

Create a simple boundary map for each in-scope service:

• Inputs you receive from the customer (files, API calls, approvals, master data)
• Processing you perform
• Outputs you provide (reports, exports, postings, confirmations)
• Touchpoints where a customer action is required (configuration, review, approval, reconciliation)

Deliverable: Service boundary + dependency map (a one-pager per service is enough).

Step 2: Draft CUECs from the perspective of each control objective

Start from your SOC 1 control objectives (or draft objectives if in readiness). For each objective, ask:

• What must be true in the customer environment for this objective to hold?
• What can the customer do to prevent or detect errors your service cannot prevent?
• What configurations, roles, approvals, or monitoring must the customer maintain?

Write CUECs as action statements:

• “User entity restricts access to the platform’s payment approval role to authorized personnel and reviews access changes.”
• “User entity reviews exception reports generated by the service and investigates/resolves exceptions within the customer’s defined timeframes.”
• “User entity reconciles output reports to source records and investigates discrepancies.”

Keep them concrete. Avoid aspirational language.

Step 3: Validate CUECs with process owners and customer-facing teams

Run a structured review with:

• Control owners (engineering, ops, support)
• Product leadership (service definition accuracy)
• Customer success / implementation (is it understandable and deliverable?)
• Legal/compliance (contractual alignment, wording discipline)

Decision point: If a CUEC is critical and many customers likely don’t do it, you have a design problem. Either:

• move responsibility into your service (build/operate the control), or
• redesign the service so the dependency is minimized, or
• make the CUEC explicit in onboarding and contractual/implementation materials.

Step 4: Decide where CUECs will live and how they will be communicated

Minimum expectation is CUECs appear in the SOC 1 report language and are distributed through the normal SOC 1 distribution process ¹. Operationally, customers need them in places they actually read, such as:

• Customer admin guide / implementation guide
• Security/compliance portal
• Onboarding checklists
• Release notes for changes that affect responsibilities

Create a communication plan with:

• Owner (role, not a person)
• Trigger events (new customer, material change, annual refresh)
• Channels (SOC report package, customer portal, email notice)
• Tracking method (ticket, CRM note, portal acknowledgment)

Step 5: Build a CUEC-to-control mapping matrix (your audit anchor)

Create a table that maps:

• Control objective → your control activity → related CUECs → customer communication artifact

Example structure:

SOC 1 area	Control objective	Your control(s)	CUEC(s)	Where communicated	Evidence location

This matrix is what auditors and internal stakeholders use to see completeness and consistency.

Step 6: Operationalize updates through change management

CUECs drift when products change. Add a “CUEC impact check” to:

• Product change reviews
• New feature launches affecting financial reporting flows
• Integration changes
• Role/permission model changes

If you already have a change advisory board (CAB) process, add a checkbox and require compliance sign-off when CUECs are impacted.

Step 7: Prove communication and comprehension (lightweight but defensible)

Auditors rarely require proof that every customer implemented each CUEC, but they will test whether you:

• defined them clearly, and
• communicated them through established channels, and
• kept them current.

Use lightweight proof:

• Versioned admin guide pages
• Customer onboarding checklists with CUEC section
• Portal logs showing SOC report package access
• Release notes emails for responsibility changes

If you use Daydream to manage third-party and customer-facing compliance collateral, treat CUECs as a controlled document set with versioning, approvals, and distribution tracking. That turns “we told them” into evidence.

Required evidence and artifacts to retain

Keep artifacts that prove design, approval, and communication:

1. CUEC register (master list) with owner, service scope, last reviewed date, and change history.
2. CUEC-to-control mapping matrix (control objective linkage).
3. Customer-facing CUEC publication (SOC 1 section draft, admin guide, onboarding materials).
4. Approvals (GRC/compliance + process owner sign-off).
5. Distribution evidence (portal publication logs, onboarding tickets, customer notification emails).
6. Change management records showing CUEC impact assessment for material changes.

Common exam/audit questions and hangups

Auditors tend to probe the same failure modes:

• “How did you determine these are the necessary CUECs?”
  Expect to show your dependency mapping and linkage to control objectives.

• “Where exactly are the CUECs communicated to customers?”
  Show the SOC 1 wording plus the customer-facing operational artifact (guide/checklist).

• “How do you ensure CUECs stay current after product changes?”
  Provide change management hooks and evidence of reviews.

• “Are any CUECs actually your responsibility?”
  Auditors will challenge “paper CUECs” that look like you are offloading your own control gaps.

• “Do your CUECs align with the system description and subservice organization model?”
  If you rely on subservice organizations, confirm boundaries are consistent.

Frequent implementation mistakes and how to avoid them

Mistake 1: Publishing generic, non-testable CUECs

Bad: “Customers must maintain appropriate controls.”
Fix: Use action + object + outcome (“review settlement report and reconcile to bank activity”).

Mistake 2: Treating CUECs as boilerplate across products

One CUEC list rarely fits all services.
Fix: Maintain a baseline set, then add service-specific deltas tied to in-scope features.

Mistake 3: Hiding CUECs only in the SOC 1 report

Customers often access the SOC report annually, but they operate controls daily.
Fix: Put CUECs in onboarding and admin documentation, and reference them from the SOC 1 package.

Mistake 4: Offloading your own controls to customers

If the service org can reasonably prevent an error (for example, enforce authorization in-app), calling it a CUEC looks like a design weakness.
Fix: Use a “can the service enforce this?” test during CUEC drafting.

Mistake 5: No update mechanism

CUECs often become wrong after role/permission changes or new workflow features.
Fix: Add “CUEC impact” as a required checkpoint in change management.

Enforcement context and risk implications

No public enforcement cases were provided in the source catalog for this requirement. Practically, the risk shows up as:

• SOC 1 report qualification or unfavorable findings if dependencies are unclear ¹.
• Customer disputes when responsibilities are misaligned (for example, a customer assumes you review exceptions, but your control design assumes they do).
• Downstream audit failures at the customer, which can turn into escalations, contract friction, and churn.

Practical 30/60/90-day execution plan

Days 0–30: Define and draft

• Inventory in-scope services and transaction flows that affect financial reporting.
• Build boundary/dependency maps.
• Draft initial CUEC register and mapping matrix.
• Identify where CUECs will be published (SOC report section, admin guide, onboarding checklist).

Deliverables: boundary maps, CUEC register v1, mapping matrix v1.

Days 31–60: Validate and operationalize communication

• Run stakeholder review and approvals (control owners, product, support, compliance).
• Update customer documentation and onboarding materials.
• Define the communication workflow (new customers, annual SOC package, material changes).
• Create an internal runbook: “How to answer customer questions on CUECs.”

Deliverables: approved CUECs, published customer materials, communication runbook.

Days 61–90: Prove sustainability

• Add CUEC impact assessment to change management.
• Pilot evidence collection (select a few customers or accounts and capture distribution proof).
• Run a mock audit walkthrough: show mapping, publication, and update controls end-to-end.
• If gaps remain, convert critical CUECs into service-side controls or product features.

Deliverables: change management integration, evidence pack, mock-audit notes and remediation plan.

Frequently Asked Questions

What counts as a complementary user entity control (CUEC) versus a customer “best practice”?

A CUEC is required for your SOC 1 control objectives to be achieved. If the service can meet objectives without the customer action, treat it as guidance, not a CUEC.

Do CUECs have to be in the SOC 1 report itself?

They need to be defined and communicated as part of the SOC 1 context ¹. In practice, you should also publish them in onboarding and admin documentation so customers can operationalize them.

How specific should CUECs be about timing (for example, review frequency)?

Specify timing only when the control objective depends on it. If you can’t justify a strict interval, describe the trigger (“review exceptions after each processing run”) or align to the customer’s close process.

What if different customers use the service differently, so CUECs vary?

Maintain a baseline CUEC set plus configuration-based variants. Your mapping matrix should show which CUECs apply by module, feature flag, workflow, or integration pattern.

Can we make a CUEC that says “customer must review the SOC 1 report”?

You can instruct customers to review the report, but it rarely satisfies the need for operational controls. Auditors expect CUECs to describe concrete activities customers perform in their environment.

How do we show evidence that we communicated CUECs to customers?

Keep versioned customer-facing artifacts and distribution proof (portal publication logs, onboarding tickets, customer notices). Auditors typically accept consistent, repeatable communication evidence over ad hoc emails.

Related compliance topics

• 2025 SEC Marketing Rule Examination Focus Areas
• Access and identity controls
• Access Control (AC)
• Access control and identity discipline
• Access control management

Footnotes

1. AICPA SOC 1 overview