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Control Institute
Category: Audit Process

Management Response

Also known as: Management's Response, Management Comment
Simply put

A Management Response is the formal written explanation and action plan that an organization's leadership provides after an audit or assessment identifies findings or exceptions. It typically states how management interprets the issue and what corrective steps, if any, it intends to take. In a compliance context, it is the audited organization's opportunity to add its perspective to the auditor's or assessor's conclusions.

Formal definition

In audit and assessment contexts, a Management Response is the formal explanation and remediation plan supplied by an organization's leadership following a review, audit, or operational assessment. It generally documents management's interpretation of identified findings, exceptions, or deviations and outlines any planned corrective actions and timelines. In SOC 2 examinations, management responses are typically included by the service organization to address noted exceptions and are presented as unaudited assertions attributable to management rather than to the CPA firm; readers should note that such responses reflect management's position and are not part of the auditor's opinion. The precise placement, format, and expectations for management responses vary depending on the engagement, the applicable framework, and the practitioner or certification body involved.

Why it matters

A Management Response is what preserves the audited organization's voice within a report that is otherwise authored by an independent party. When a SOC 2 examination notes an exception, or when any audit surfaces a finding, the organization's leadership is rarely willing to let the auditor's description stand alone. The Management Response lets management explain context, dispute an interpretation, describe compensating controls, or commit to a remediation plan with timelines. For the compliance managers and GRC professionals who read and act on these reports, it is often the section that reveals whether an exception reflects a systemic weakness or an isolated, already-addressed event.

The distinction matters because a Management Response carries a different evidentiary weight than the rest of a SOC 2 report. In a SOC 2 examination, management responses are typically presented as unaudited assertions attributable to the service organization, not conclusions reached by the CPA firm. This means a reader relying on the report for vendor risk decisions should treat the response as management's position rather than as an independently verified fact. Misreading a management response as auditor-endorsed can lead to overconfidence in a remediation that has not actually been tested.

Because placement, format, and expectations vary depending on the engagement, the applicable framework, and the practitioner or certification body involved, professionals should not assume a uniform structure across reports. Understanding where a response sits, and what it does and does not represent, is essential to interpreting the finding it accompanies.

Who it's relevant to

Compliance and GRC Managers
These professionals draft or coordinate the Management Response on behalf of leadership, translating findings into clear interpretations and committed remediation plans. They must ensure the response accurately represents management's position and any planned corrective actions and timelines, while recognizing it will typically be presented as an unaudited assertion.
Auditors and Assessors
CPA firms and other practitioners present management responses within reports while keeping them distinct from their own opinion. In a SOC 2 examination they include the service organization's responses to noted exceptions but attribute those responses to management, not to the firm, so readers understand the boundary between audited conclusions and management assertions.
Vendor Risk and Procurement Teams
Those evaluating a third party's SOC 2 report rely on the Management Response to understand how the organization interprets an exception and what it intends to do about it. They should treat these responses as management's position rather than independently verified facts, and weigh them accordingly in vendor risk decisions.
Organizational Leadership
Executives are ultimately accountable for the content of a Management Response, since it documents their interpretation of findings and their commitments to corrective action. Their sign-off represents the organization's formal perspective added to the auditor's or assessor's conclusions.

Inside Management Response

Acknowledgment of the Exception
A statement from the service organization's management addressing a specific exception, deviation, or noted deficiency identified by the auditor during a SOC 2 examination, typically included within or alongside the auditor's report.
Context or Explanation
Management's perspective on the circumstances surrounding the noted exception, which may include the cause, the scope of impact, or factors relevant to understanding the finding within the review period covered.
Remediation or Corrective Action
A description of the steps management has taken or plans to take to address the exception, though the specificity and timing of these actions vary depending on the engagement and scope.
Positioning within the Report
Management responses are typically presented as unaudited information that is distinct from the CPA firm's opinion; the auditor does not attest to the accuracy of management's assertions in the response itself.

Common questions

Answers to the questions practitioners most commonly ask about Management Response.

Is a management response the same as the auditor's opinion in a SOC 2 report?
No. The management response is prepared by the service organization's management, not by the auditor. It typically appears in a separate section of the SOC 2 report and represents management's own statements, often addressing exceptions or deviations noted by the auditor. The auditor's opinion is a distinct element expressed by the licensed CPA firm conducting the examination. The two should not be conflated, as they carry different authorship and different weight in the report.
Does including a management response mean the identified exceptions have been resolved or that the controls now operate effectively?
Not necessarily. A management response typically explains management's perspective on a noted exception, such as context, remediation plans, or compensating measures, but it does not, by itself, change the auditor's findings for the period covered. The auditor's conclusions regarding design or operating effectiveness stand independently. Whether remediation has occurred and been validated depends on the scope and timing of the examination, and readers should not assume an exception is resolved simply because a response accompanies it.
Where in a SOC 2 report does the management response typically appear?
In most engagements, management responses appear alongside or following the auditor's description of tests and results, often near the exceptions to which they relate. The exact placement can vary by report and by the CPA firm's formatting conventions, so there is no single mandated location. Reviewers evaluating a report should look within the sections describing control testing and any noted deviations.
Should a management response be included for every exception noted by the auditor?
This is a scoping and disclosure decision made by management, typically in coordination with the auditor. Management may choose to respond to some or all noted exceptions. There is no universal requirement that every exception receive a response, and practices vary across engagements. Where a response is provided, it is generally most useful when it addresses the specific nature and context of the deviation rather than offering only general statements.
What kind of content is typically appropriate for a management response?
Management responses typically describe context surrounding an exception, any compensating controls, and remediation steps taken or planned. Because the response reflects management's own assertions, it should be factual and consistent with the auditor's findings rather than contradicting them. The appropriate level of detail depends on the exception and the audience, and readers should treat these statements as management's perspective rather than as independently verified conclusions.
How does a management response in a SOC 2 report differ from documentation used in ISO 27001?
A management response is a feature of the SOC 2 attestation report, authored by the service organization and appearing within a report produced under the AICPA examination framework. ISO 27001, by contrast, is a certification against a management system standard, and its outcomes are documented differently, through items such as audit findings, corrective actions, and the Statement of Applicability rather than a report-style management response. The concepts are not directly equivalent, and documentation practices should follow the requirements of the applicable framework.

Common misconceptions

A management response corrects or removes the underlying exception from the SOC 2 report.
The exception typically remains documented in the report regardless of the management response. The response provides management's perspective but does not alter the auditor's findings or opinion for the period covered.
The auditor verifies and vouches for the statements made in a management response.
Management responses are generally treated as unaudited information provided by the service organization. The CPA firm's opinion covers the controls and the examination, not the assertions within management's response.
Management responses are a concept unique to SOC 2 reports.
The idea of a party responding to findings appears across compliance contexts, including audits related to an ISO 27001 certification. However, the mechanics differ, and a SOC 2 attestation report should not be conflated with an ISO 27001 certification process.

Best practices

Keep management responses factual and concise, focusing on the specific exception noted rather than broad reassurances, since the response does not change the auditor's documented findings.
Clearly distinguish remediation already completed from actions still planned, and avoid asserting that a control fully eliminates risk, as a SOC 2 report attests only to the controls and period covered and does not guarantee freedom from breaches.
Coordinate the response with the CPA firm performing the SSAE 18 examination to ensure it is positioned appropriately as unaudited information distinct from the auditor's opinion.
Avoid language that overstates the significance of the response, and do not imply that it converts an exception into a passing result for the review period.
Where the same finding may be relevant to other frameworks such as an ISO 27001 ISMS, address each framework's process separately rather than assuming a response in one context satisfies the other.
Retain internal documentation supporting the remediation described, since evidence of corrective action may be relevant to subsequent examinations depending on scoping decisions.