Which type of auditing typically focuses on an organization’s internal controls regarding financial reporting?

The correct answer is SOC 1, which specifically relates to audits that evaluate and report on an organization's internal controls regarding financial reporting. The primary purpose of a SOC 1 audit is to ensure that the controls in place relevant to financial transactions, such as those affecting financial statements, are operating effectively. This is particularly crucial for service organizations that handle financial data on behalf of their clients, as these controls directly impact the reliability of the financial reporting.

In contrast, a SOC 2 audit centers around the security, availability, processing integrity, confidentiality, and privacy of data. It focuses on a broader range of operational and compliance aspects rather than specifically on financial reporting controls. SOC 3 is similar to SOC 2 but provides a public report that can be shared more broadly without going into the same level of detail regarding internal controls. An operational audit focuses on evaluating the efficiency and effectiveness of an organization’s operations rather than its financial reporting processes. Therefore, SOC 1 is distinct in its targeted approach towards financial controls, making it the correct choice for this question.