TSC-PI1.4 Guidance

TSC-PI1.4 is a Processing Integrity criterion in the AICPA Trust Services Criteria (TSC) used in SOC 2 examinations. The requirement is short, but audits fail on the operational details: teams can describe how outputs “should” be handled, yet cannot show consistent review, monitoring, and evidence across the reporting period.

“System outputs” is broader than reports. It includes anything your system produces that a customer, downstream system, finance team, operations team, or third party relies on: invoices, payment files, notifications, API responses, exports to customers, model scores, statements, dashboards, audit exports, and batch job results. If an output is wrong, customers can be impacted immediately, and you may face financial reporting issues, contractual breaches, or support escalations.

This page explains the tsc-pi1.4 guidance requirement in operator terms: who it applies to, the minimum set of procedures auditors expect to see, how to implement them in a way that scales, and what evidence to retain so you can pass a SOC 2 without heroics at the end of the period ¹.

Regulatory text

Requirement (excerpt): “The entity implements policies and procedures over system outputs.” ¹

What the operator must do:
You must (1) document how your organization controls system outputs, (2) run those controls consistently, and (3) be able to prove it with evidence. In practice, that means you define which outputs matter, identify where errors could be introduced, implement checks (automated or manual) to prevent/detect issues, and maintain an audit trail demonstrating the checks occurred and exceptions were handled.

Plain-English interpretation

Your systems produce outputs that people and other systems rely on. TSC-PI1.4 expects you to have written rules and repeatable steps that keep those outputs trustworthy. Auditors will look for two things: clear procedures and proof that the procedures are followed across the SOC 2 period, not just “we have a process” statements ¹.

Who it applies to

Entity scope

• Any organization undergoing a SOC 2 examination that includes Processing Integrity criteria ¹.

Operational context (where it shows up)

TSC-PI1.4 is relevant anywhere your service produces outputs that:

• trigger customer actions (alerts, notifications, approvals),
• move money or create financial commitments (invoices, payout files, billing exports),
• support customer trust or compliance claims (audit logs exported to customers, compliance reports),
• feed downstream systems via integrations (API responses, webhooks, SFTP drops, event streams),
• reflect computed results (calculations, transformations, scoring, aggregation, settlement).

If you have batch processing, ETL pipelines, reporting layers, billing engines, workflow automation, or external data feeds, you have “system outputs” worth controlling.

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

The fastest path is to treat outputs like “products” with owners, specs, checks, and evidence.

Step 1: Define “system output” for your SOC 2 scope

Write a one-paragraph definition that fits your service. Include examples relevant to your stack (reports, exports, API responses, notifications). Anchor it in your system boundary and SOC 2 description so there’s no ambiguity during fieldwork.

Artifact: “System Outputs Definition” (policy or standard section).

Step 2: Create an output inventory and assign owners

Build an inventory that is complete enough to audit. Each entry should include:

• output name and description,
• producing system/component/job,
• consumers (internal teams, customers, third parties),
• delivery mechanism (UI, email, API, SFTP, webhook),
• frequency/trigger,
• business impact if wrong,
• control owner (role, not just a name).

Keep it simple. A spreadsheet works if it is governed and version-controlled.

Artifact: “System Output Inventory” with ownership.

Step 3: Risk-rank outputs and define required control points

Not every output needs the same rigor. Create tiers (for example: high/medium/low impact) and set minimum required controls per tier.

Common control points auditors accept (choose what fits each output):

• Input validation (are required fields present, are values in allowed ranges)
• Processing validation (record counts, checksums/hashes, completeness checks)
• Authorization (who can generate, approve, release, or resend outputs)
• Pre-release review/approval (especially for high-impact files and customer-facing statements)
• Post-release monitoring (alerts on failures, anomalies, volume spikes, latency)
• Reconciliation (source-to-output tie-outs: totals, counts, sample checks)
• Exception handling (ticketing, root cause, corrective action, customer notification)

Artifact: Output control matrix mapping tier → required controls.

Step 4: Document procedures that match real operations

Auditors test what you do, not what you intended. Write procedures at “runbook” level:

• who does the check,
• what evidence is produced,
• where evidence is stored,
• what happens if the check fails,
• escalation path and timelines,
• how you approve changes to the output logic.

This is where teams often fall short: the procedure exists, but it doesn’t identify the system-of-record for evidence.

Artifacts: Output validation SOPs/runbooks; approval workflow descriptions.

Step 5: Implement monitoring and review (and make it provable)

For automated outputs (jobs, integrations), implement monitoring that produces durable evidence:

• job success/failure logs,
• alert notifications routed to a managed channel (ticketing system, on-call tool),
• dashboards for error rates and anomalies,
• periodic review that someone attests to.

For manual outputs (ad-hoc reports, support exports), create a controlled request/release workflow:

• ticket required,
• manager approval for sensitive/high-impact outputs,
• standardized query/report template,
• peer review for one-off data pulls where feasible.

Artifacts: Monitoring configuration screenshots/exports, alert routing evidence, periodic review records.

Step 6: Maintain an audit trail (design it, don’t improvise it)

TSC-PI1.4 evidence typically lives in multiple systems (CI/CD, logging, ticketing, BI tools, ERP, customer comms). Decide now where your canonical evidence lives and how you retrieve it.

Minimum audit-trail elements per output:

• generation event (who/what triggered it, when),
• version of code/config that produced it (or change record reference),
• validation performed (automated check output or reviewer sign-off),
• release/delivery confirmation (sent to customer/system, accessible by them),
• exceptions and remediation (ticket IDs, re-run approvals, customer notice if applicable).

Artifacts: Log extracts, ticket links, approval records, reconciliation files.

Step 7: Conduct periodic assessments and testing

SOC 2 expects you to demonstrate control operation and effectiveness ¹. Build a lightweight testing plan:

• sample outputs across the period,
• confirm required checks occurred,
• verify exceptions were handled per procedure,
• document gaps and corrective actions.

This can be owned by GRC, Internal Audit, or a control owner with second-line review.

Artifacts: Control test sheets, sampling methodology, results, remediation tracker.

Required evidence and artifacts to retain (audit-ready list)

Use this as a document request checklist:

• Output inventory with owners and risk tier
• Policies/standards covering system outputs (definition, roles, approval, exception handling)
• Runbooks/SOPs for key outputs (generation, validation, release, rerun)
• Monitoring/alert configuration evidence and alert history
• Reconciliation records (counts/totals tie-outs) for selected outputs
• Review/approval evidence (tickets, sign-offs, workflow logs)
• Audit trail logs showing output generation and delivery events
• Change management linkages for output logic changes (change tickets, pull requests)
• Periodic assessment/testing results and remediation evidence

Common exam/audit questions and hangups

Auditors tend to probe the same pressure points:

1. “Show me your system outputs.”
   Hangup: you list reports but omit exports, webhooks, API responses, or billing artifacts.

2. “How do you know outputs are complete and accurate?”
   Hangup: you describe QA testing in development, but cannot show operational checks in production.

3. “Who reviews/approves high-impact outputs?”
   Hangup: approvals are informal (Slack “looks good”) and not retained.

4. “How do you detect failed or anomalous output generation?”
   Hangup: alerts exist but route to unmanaged inboxes or have no ticket trail.

5. “Provide evidence for a sample across the period.”
   Hangup: evidence is overwritten, not retained long enough, or impossible to correlate to specific output events.

Frequent implementation mistakes and how to avoid them

Mistake	Why it fails in SOC 2	Fix
Treating “outputs” as only formal reports	Auditors will include exports, files, API responses, notifications	Inventory outputs by data flows and customer commitments
Writing policies without execution hooks	Policy exists, but no evidence trail	Put “where evidence lives” in every procedure
Relying on ad-hoc reviews	Sampling reveals gaps and inconsistency	Standardize via tickets/workflows and required fields
Alerts without ownership	No one can prove response and closure	Route alerts to ticketing/on-call with closure evidence
No periodic testing	You discover failures during audit	Run internal control tests and track remediation

Enforcement context and risk implications

SOC 2 is an assurance framework, not a regulatory enforcement regime ¹. The risk is still real: weak output controls often lead to customer-facing incidents (wrong invoices, missing records, incorrect statements, erroneous notifications) and downstream integrity issues that affect contractual obligations and trust. In SOC 2 terms, the common outcome is a control deficiency or exception because you cannot demonstrate consistent operation and evidence over the examination period.

Practical 30/60/90-day execution plan

Days 0–30: Define scope, inventory, and minimum controls

• Confirm SOC 2 scope boundaries and list systems that generate outputs.
• Draft “System Outputs Definition” and get it approved by the control owner.
• Build the initial output inventory with owners.
• Create a tiering scheme and an output control matrix (what controls each tier requires).
• Identify top high-impact outputs and implement quick wins: ticketed approvals, basic reconciliations, durable logging.

Deliverables: definition, inventory, control matrix, initial evidence examples.

Days 31–60: Document procedures and harden monitoring/evidence

• Write runbooks/SOPs for high-impact outputs (generation, validation, release, rerun).
• Ensure monitoring produces retainable artifacts (alert history, job logs, ticket links).
• Standardize exception handling with ticket categories and required fields (root cause, corrective action, customer impact).
• Train operators and support teams on the procedures and what evidence to retain.

Deliverables: SOP pack, monitoring evidence, exception workflow, training attestation.

Days 61–90: Test, remediate, and make it audit-repeatable

• Run a control effectiveness test over sampled outputs from different weeks/months ¹.
• Close gaps: missing approvals, incomplete logs, weak reconciliations, unclear ownership.
• Implement a periodic review cadence for the output inventory and control matrix.
• Prepare an “audit binder” folder structure by output with direct links to evidence sources.

Deliverables: test results, remediation tracker, periodic review records, audit binder.

Where Daydream fits (practical use)

If you struggle with evidence sprawl, Daydream can serve as a control operating system for TSC-PI1.4: map outputs to controls, assign owners, run scheduled control checks, and keep time-stamped evidence linked to each output and audit period. The goal is fewer one-off screenshots and less last-minute log archaeology.

Frequently Asked Questions

What counts as a “system output” under TSC-PI1.4?

Treat any produced artifact that a person or downstream system relies on as an output: reports, exports, invoices, API responses, notifications, and integration payloads. Define it explicitly for your SOC 2 scope and anchor it to your system boundary ¹.

Do we need manual review of every output?

No. Risk-rank outputs and apply stronger controls to high-impact outputs. For many automated outputs, automated validation plus monitoring and exception handling is stronger than manual review.

What evidence is usually most persuasive to SOC 2 auditors?

Time-stamped logs and system records that show generation, validation, and delivery, plus tickets or approvals for exceptions. Auditors prefer evidence that is hard to fabricate after the fact ¹.

How do we handle ad-hoc customer data exports without failing this requirement?

Require a ticket, document requestor/approver, use standardized query templates, and store the export metadata (who ran it, when, what dataset). Keep the approval and execution trail in the ticketing system.

Our monitoring exists, but alerts go to email. Is that acceptable?

It can be, but email is a weak evidence source unless it is retained and tied to response/closure. Route alerts to an on-call system or ticketing workflow where acknowledgment and resolution are recorded.

How do we show control effectiveness during the audit period?

Run periodic internal tests that sample output events and confirm checks occurred and exceptions were handled per procedure. Retain the test plan, sample list, results, and remediation actions 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