What language signals an adverse SOC 1 report?

The correct choice indicates phrases typically associated with an adverse SOC 1 report, which signifies that the controls in place for a service organization are not operating effectively or are inadequately designed. When an auditor concludes that certain controls do not fairly present or are not suitably designed, it raises significant concerns about the reliability of the financial reporting and internal controls of the organization. This kind of language suggests that the service organization's controls may expose user entities to risks, thereby undermining trust in the overall control environment.

In contrast, favorable phrases or terms suggesting that controls are adequate imply a positive assessment of the service organization's controls and would not signal an adverse report. Thus, while the other options reflect positive or neutral assessments, they do not communicate the critical shortcomings that would be highlighted in an adverse SOC 1 report.