Which regulation in the United States defines the requirements for a CSP to implement and report on internal accounting controls?

The correct answer is SOX, which stands for the Sarbanes-Oxley Act. This regulation was enacted in 2002 to protect investors from fraudulent financial reporting by corporations. One of the key aspects of SOX is its requirement for companies, including cloud service providers (CSPs), to establish and maintain adequate internal controls over financial reporting. This includes not only the implementation of these controls but also the reporting on their effectiveness.

CSPs handling financial data are required to comply with SOX to ensure transparency and integrity in financial reporting. They must conduct regular audits and assessments to verify that their internal controls are functioning appropriately. This regulatory framework is essential for establishing trust with clients and stakeholders, particularly in industries that are sensitive to financial misconduct.

Other regulations like HIPAA, FERPA, and GDPR are focused on different aspects of data protection and privacy, such as healthcare information (HIPAA), educational records (FERPA), and personal data protection (GDPR), but they do not specifically address the requirements for internal accounting controls in the same manner as SOX does. Therefore, SOX is the relevant regulation that mandates CSPs to implement and report on internal accounting controls.