TSC-CC2.3 Guidance

TSC-CC2.3 requires you to have a reliable way to communicate with external parties about matters that affect internal control, and to show auditors that those communications are defined, owned, executed, and retained as evidence. Operationalize it by mapping external stakeholders, defining communication triggers, standardizing channels and approvals, and keeping an audit-ready trail. ¹

Key takeaways:

• Define who you communicate with externally, what you communicate, and when it must happen for control-impacting events. ¹
• Treat external communications as a control: documented procedure, assigned owners, review cadence, and retained evidence. ¹
• Audits fail on “we did it” without proof; build an evidence log that ties messages to triggers and approvals. ¹

The tsc-cc2.3 guidance requirement focuses on external communications that matter for internal control. In SOC 2 terms, this is less about marketing comms and more about making sure customers, regulators, auditors, business partners, and other third parties receive timely, accurate information when something changes the control environment. Examples include security incidents with customer impact, material changes to policies that customers rely on, significant subcontractor changes, or updates to terms that affect processing responsibilities.

For a Compliance Officer, CCO, or GRC lead, the fastest path is to turn “communicates with external parties” into an owned operating process: defined stakeholder groups, defined triggers, standard templates, a review/approval workflow, and a central record of what was sent and why. Auditors typically look for consistency and traceability: the communication should be linked to a known event or obligation, sent through controlled channels, and retained in a way that supports sampling and testing. ¹

If you use Daydream (or any GRC system), the win is centralizing triggers, approvals, and evidence so you can answer audit questions quickly without chasing screenshots across email, ticketing, and Slack.

Regulatory text

Requirement (excerpt): “COSO Principle 15: The entity communicates with external parties regarding matters affecting the functioning of internal control.” ¹

What the operator must do:
You must implement a repeatable method to (1) identify external parties that need control-relevant information, (2) determine what events or topics require external communication, (3) send communications through managed channels with appropriate review, and (4) retain evidence that communications occurred and were complete. Auditors will expect the process to be proportionate to your business and scoped systems, but still demonstrably operational. ¹

Plain-English interpretation (what CC2.3 is really testing)

Auditors are testing whether your organization can reliably communicate outward when internal control is impacted. That includes:

• Outbound transparency for issues that affect customers’ reliance (incidents, outages, policy changes, control failures with external impact).
• Contract and responsibility alignment with customers and other third parties (who does what, when you notify, how you escalate).
• Consistency and traceability so communications aren’t ad hoc, inconsistent across accounts, or impossible to prove after the fact. ¹

Think of CC2.3 as “external-facing control hygiene.” If an internal control changes or fails, the people who rely on it must be informed through a controlled process.

Who it applies to (entity and operational context)

Applies to: Organizations undergoing a SOC 2 audit against the AICPA Trust Services Criteria, where CC2.3 is in scope as part of the Common Criteria. ¹

Operational context where it shows up most:

• SaaS and cloud services with customer security expectations and contractual notice clauses
• Managed service providers handling customer environments
• Data processors with subprocessors and shared responsibility boundaries
• Companies that publish SOC 2 reports and answer customer security questionnaires

External parties commonly in scope (tailor to your reality):

• Customers (security contacts, procurement, legal)
• Prospects in diligence (security/compliance reviewers)
• Subprocessors and critical vendors (security contacts, account owners)
• Regulators or law enforcement (only where applicable to your business)
• Independent auditors (SOC 2 auditor, penetration testers)

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

Step 1: Define your “external communications that affect internal control” scope

Create a one-page scoping statement that answers:

• Which products/services and systems are in your SOC 2 boundary
• Which types of communications count (incident notifications, subprocessor changes, policy updates, audit report distribution, breach/regulatory notices where applicable)
• What is explicitly out of scope (general marketing emails, non-control product announcements)

Deliverable: External Communications Scope Statement mapped to SOC 2 boundary. ¹

Step 2: Identify external stakeholder groups and owners

Build a stakeholder matrix:

Stakeholder group	Examples	Primary owner	Backup	Channel
Customers (security contact)	customer security@, portal admins	Security/Trust	Support lead	Trust portal, email
Customers (legal/procurement)	MSA contacts	Legal	CCO/GRC	Email
Subprocessors	cloud hosting, support tooling	Vendor Management	Security	Ticket + email
Auditor	SOC 2 firm	GRC	Controller	Secure portal

Key point: auditors want to see ownership, not “shared responsibility by committee.” ¹

Step 3: Define communication triggers (the “when”)

Create a trigger register. Examples to include (edit for your business):

• Security incident with customer data impact or material risk
• Extended production outage impacting contractual commitments
• Material control failure (for example, access review not performed) with customer reliance implications
• Subprocessor onboarding or replacement affecting customer data flows
• Material updates to security policies or terms that change responsibilities
• SOC report availability or scope changes (as committed in contracts or customer expectations)

For each trigger, define:

• Severity threshold for notification
• Who approves messaging (Legal, Security, CCO)
• Required content elements (facts known, mitigations, customer actions)
• Distribution method (email list, trust portal update, ticket to customer)

Deliverable: External Communication Trigger Register. ¹

Step 4: Standardize the workflow (draft → review → send → archive)

Write a procedure that is easy to follow under stress. Minimum workflow states:

1. Initiate: open a comms record (ticket/case) and select trigger type
2. Draft: use a template appropriate to trigger
3. Review: Security validates technical accuracy; Legal validates claims and commitments; GRC validates alignment to SOC commitments
4. Approve: named approver signs off
5. Send/Publish: through controlled channels (trust portal, status page, customer email distro, secure file share)
6. Archive: store final message, recipients, timestamps, approvals, and supporting context

If you run Daydream, implement this as a lightweight workflow with required fields and evidence attachments so every event produces a complete audit trail without manual chasing.

Deliverable: External Communications Procedure with RACI and workflow. ¹

Step 5: Create templates that reduce risk

Templates prevent overpromising and inconsistent statements. Maintain at least:

• Incident notification template (customer-facing)
• Subprocessor change notice template
• Policy/terms update notice template
• SOC 2 report distribution template (with permitted-use language aligned to how you distribute reports)

Keep templates version-controlled and reviewed.

Deliverables: Template pack + version history. ¹

Step 6: Implement monitoring and periodic review

Auditors often find that the process exists but decays. Put a recurring review on the calendar:

• Confirm stakeholder lists are current
• Confirm triggers still match contracts and operational reality
• Sample recent communications for completeness (approval, timing, content, archiving)
• Train new on-call incident commanders and customer-facing teams

Deliverable: Review checklist + completed review records. ¹

Step 7: Test control effectiveness (audit readiness)

Before your SOC 2 examination period ends, perform an internal test:

• Pick recent events (incidents, outages, policy updates, subprocessor changes)
• Verify each has a complete comms record with approvals and final delivery proof
• Record gaps and remediation

Deliverable: Control self-test results and remediation tickets. ¹

Required evidence and artifacts to retain

Auditors sample. Your job is to make sampling painless.

Policy and procedure

• External communications policy/procedure (approved, current)
• RACI / ownership list

Operational records (the “show me” evidence)

• Communication trigger register (current and approved)
• Communication records/cases for sampled events, including:
  • Draft and final communication
  • Approval evidence (email approval, ticket approval, e-sign)
  • Distribution evidence (sent email with headers, portal publication log, status page entry)
  • Recipient list or customer segmentation logic
  • Date/time stamps and version history

Monitoring/testing

• Periodic review outputs (checklist, meeting notes, action items)
• Training records for teams involved (incident response, support, account management)
• Self-test results and remediation tracking

Retention note: keep evidence in a centralized system with consistent naming and access controls so you can produce it without exporting sensitive content broadly.

Common exam/audit questions and hangups

Auditors commonly probe:

• “What external parties are relevant to your system description and commitments?” ¹
• “Show the triggers that require customer notification and who approves.” ¹
• “Provide a sample of communications for an incident or significant change, with evidence of review and delivery.” ¹
• “How do you ensure the customer contact list is current?” ¹
• “How do you prevent inconsistent messaging across Support, Sales, and Security?” ¹

Hangups that slow audits:

• Evidence scattered across email, CRM, ticketing, and Slack with no master index
• No explicit trigger definitions, so “why did you notify for Event A but not Event B?” becomes subjective
• Communications sent by account teams without compliance review or retention

Frequent implementation mistakes (and how to avoid them)

1. Mistake: Treating CC2.3 as a PR function.
   Fix: define control-relevant comms (incidents, material changes, responsibility boundaries), and tie each to a trigger and owner. ¹

2. Mistake: No proof of distribution.
   Fix: require distribution evidence as a mandatory attachment (email headers, portal logs, status page entry, customer ticket). ¹

3. Mistake: Templates that promise specifics your ops can’t meet.
   Fix: Legal + Security + GRC co-own templates; lock them and track versions. ¹

4. Mistake: Stakeholder lists maintained informally.
   Fix: define the system of record (CRM, support platform, trust portal directory) and a recurring review owner. ¹

5. Mistake: No testing before the auditor samples.
   Fix: run a pre-audit self-test and remediate gaps; store results as evidence of monitoring. ¹

Enforcement context and risk implications

SOC 2 is an audit framework, not a regulatory enforcement regime, so you should expect audit findings rather than “fines” tied to CC2.3. ¹ The business risk is still real:

• Customer trust erosion when communications are inconsistent or late
• Contractual disputes if notice obligations are missed
• Control report qualifications if the auditor cannot verify operation or evidence retention

Practical 30/60/90-day execution plan

Days 1–30: Build the minimum viable CC2.3 process

• Draft and approve the external communications procedure and RACI.
• Create the stakeholder matrix and pick systems of record for contacts.
• Publish the trigger register with clear notification thresholds.
• Stand up an evidence repository structure (folders or GRC tool objects) and naming convention.

Days 31–60: Operationalize and generate evidence

• Implement templates for incident and material change notices.
• Add workflow approvals (Security, Legal, GRC) in your ticketing system or Daydream.
• Train incident response and customer-facing leads on “open a comms record every time.”
• Run one tabletop exercise focused on communications and evidence capture; record outputs.

Days 61–90: Monitor, test, and harden for audit sampling

• Perform an internal control self-test by sampling recent events and comms.
• Fix gaps: missing approvals, missing delivery logs, unclear triggers.
• Schedule recurring reviews and assign owners.
• Prepare an “auditor packet” index that links each sampled event to a complete comms record.

Frequently Asked Questions

What counts as an “external party” for CC2.3?

Any third party that reasonably relies on your controls or needs control-relevant information, commonly customers, critical vendors/subprocessors, and auditors. Define your own stakeholder groups in a matrix and keep it current. ¹

Do we need a formal policy, or is an incident response runbook enough?

A runbook helps, but auditors usually want a documented procedure that covers more than incidents, including material changes and other control-impacting communications. If you use a runbook, extend it with triggers, approvals, and retention requirements. ¹

How do we prove a communication was sent?

Keep objective distribution evidence tied to the comms record: email headers, portal publication logs, status page entries, or customer ticket updates. Store approvals and final content alongside the distribution proof. ¹

Our account teams email customers directly. Is that a problem?

It becomes a problem if messages are inconsistent, lack approvals, or are not retained for audit. Route control-relevant comms through a defined workflow or require account teams to file the final message and recipient evidence into the comms record. ¹

Do we need to notify customers about every internal control failure?

No universal rule exists in the criterion text; you need defined triggers for what requires external communication based on customer reliance and your commitments. Document the thresholds and apply them consistently. ¹

What’s the easiest way to make this audit-ready?

Centralize triggers, approvals, and evidence in one workflow so every event produces a complete record. Teams often implement this in a GRC tool like Daydream or a tightly governed ticketing process with required fields and attachments. ¹

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 Trust Services Criteria 2017, 2017