Investing in SOC 2 compliance is a forward-thinking move for your organization’s future. As with any valuable investment, it requires a substantial commitment of time, resources, and finances. But, How much does a SOC 2 audit cost? Let’s investigate!
What is SOC 2 audit?
Firstly, it’s important to understand that SOC 2 audits are conducted by independent auditors who are certified public accountants (CPAs) with specialized knowledge of information systems and security. These auditors assess the service organization’s systems, policies, procedures, and controls related to the TSCs.
The audit process typically involves several stages, including planning, testing, and reporting. During the planning stage, the auditor will gather information about the service organization’s business processes, systems, and controls, and will develop an audit plan based on the identified risks.
The testing stage involves the auditor performing various tests and procedures to evaluate the effectiveness of the service organization’s controls and processes. For example, the auditor may review documentation, interview employees, perform vulnerability scans or penetration testing, and assess physical security controls.
Based on the results of the testing, the auditor will issue a report that describes the service organization’s controls related to each TSC, identifies any weaknesses or deficiencies in the controls, and provides recommendations for improving them. There are two types of SOC 2 reports:
- SOC 2 Type 1: This report describes the service organization’s systems and controls as of a specific date. It provides a snapshot of the controls at a particular point in time.
- SOC 2 Type 2: This report covers a period of time (usually six or twelve months) and evaluates the effectiveness of the service organization’s controls over that period. It provides a more comprehensive view of the controls over time and is typically considered more valuable by customers and stakeholders.
Read More : What Is SOC 2?
It’s important to stress that SOC 2 audits are not a one-time event. Service organizations typically undergo SOC 2 audits on an annual basis to ensure that their controls and processes remain effective and to address any issues or deficiencies that were identified in previous audits. In summary, SOC 2 audits are an important tool for service organizations to demonstrate their commitment to security, availability, processing integrity, confidentiality, and privacy. By undergoing a SOC 2 audit, service organizations can provide assurance to their customers and stakeholders that their systems and processes are trustworthy and reliable.
Factors affecting SOC 2 audit cost
Before directly jumping into the cost, it’s worth considering that the cost itself can be different based on several factors, including:
- Type of audit:
SOC 2 Type 1 audits are typically less expensive than SOC 2 Type 2 audits because they evaluate controls at a single point in time. SOC 2 Type 2 audits evaluate controls over a period of time (usually 6 to 12 months) and require more time and resources to complete. Additionally, SOC 2 Type 2 audits require additional testing and reporting, which can increase the overall cost of the audit.
- Scope of the audit:
The scope of the audit refers to the specific areas of an organization’s operations and information systems that will be evaluated during the audit. The more areas that are included in the audit, the more time and resources will be required to complete the audit. Organizations should carefully define the scope of the audit based on their specific needs and the Trust Services Criteria that are most relevant to their operations.
- Complexity of controls:
If an organization has a large number of controls to evaluate or if the controls are complex, this can increase the time and resources required to complete the audit. For example, controls related to data encryption or access controls may be more complex to evaluate than controls related to employee training or documentation.
- Preparation for the audit:
Prior to the audit, organizations should ensure that their controls and processes align with the Trust Services Criteria. This can reduce the time and resources required to complete the audit. On the other hand, if an organization has gaps or weaknesses in their controls, this may require additional time and resources to address prior to the audit.
- Technology platform:
Some audit firms use technology platforms to streamline the audit process and reduce the time and resources required to complete the audit. The cost of using these platforms may be included in the overall cost of the audit. Additionally, some audit firms may charge additional fees for providing access to these platforms.
- Experience and qualifications of the auditor:
The experience and qualifications of the auditor can impact the cost of the audit. More experienced and qualified auditors may charge higher rates for their services. However, working with an experienced and qualified auditor can also help to ensure that the audit is completed efficiently and effectively, which may ultimately reduce the overall cost of the audit.
Overall, there are several other factors that can impact the cost of a SOC 2 audit. By carefully considering these factors and working closely with their auditor, organizations can help to manage costs and achieve compliance with the Trust Services Criteria.
Cost breakdown of SOC 2 audit
Below is a breakdown of the typical costs associated with a SOC 2 audit:
|Cost Category||Description||Average Cost Range|
|Professional Fees||Hourly rate charged by the auditor for their time||$5,000 – $20,000+|
|Travel Expenses||Airfare, hotel accommodations, and meals for auditor travel||$500 – $5,000+|
|Technology Costs||Infrastructure upgrades to meet TSC requirements||$100 – $50,000+|
|Other Expenses||Document storage, data backup, administrative costs||$100 – $5,000+|
The professional fees for a SOC 2 audit can range from $5,000 to $20,000 or more, depending on the scope of the audit and the experience of the auditor. The auditor will charge an hourly rate for their time, and the total cost will depend on the number of hours required to complete the audit.
If the auditor needs to travel to the organization’s location to conduct the audit, the business will be responsible for paying the auditor’s travel expenses. This may include airfare, hotel accommodations, and meals. Travel expenses can range from a few hundred dollars to several thousand dollars, depending on the distance and duration of travel.
To meet the TSC, an organization may need to invest in technology and infrastructure upgrades. For example, they may need to upgrade their firewalls, implement encryption technology, or purchase new software to meet the TSC. These costs can range from a few hundred dollars to tens of thousands of dollars, depending on the organization’s existing technology infrastructure and the specific TSC requirements.
There may be additional expenses associated with the SOC 2 audit, such as document storage, data backup, and administrative costs. These costs should be discussed with the auditor and factored into the overall cost of the audit. Depending on the organization’s needs, these expenses can range from a few hundred dollars to several thousand dollars.
It’s important to note that the cost of a SOC 2 audit can vary widely depending on the organization’s unique circumstances. However, by understanding the typical cost breakdown and taking steps to minimize those costs, businesses can achieve SOC 2 compliance without breaking the bank.
Tips for Managing SOC 2 audit costs
Managing the cost of a SOC 2 audit is important for businesses of any size. The costs associated with an audit can quickly add up, so it’s important to take steps to manage those costs and ensure that the organization is getting the most value out of the audit. Below are some tips for managing SOC 2 audit costs:
- Define the scope of the audit – Clearly defining the scope of the audit can help to minimize costs. By identifying the specific systems and processes that will be evaluated in the audit, businesses can avoid unnecessary work and reduce the amount of time required to complete the audit.
- Prepare for the audit – Investing in internal controls and preparing for the audit can help to minimize the time required from the auditor and reduce overall costs. Organizations that have a strong understanding of the TSC and have implemented controls to meet those requirements are likely to require less time from the auditor, resulting in a lower cost.
- Shop around for auditors – Not all auditors are created equal. Businesses should take the time to shop around and find an auditor that offers the experience and expertise required for the audit, but at a reasonable cost.
- Negotiate fees – Once an auditor has been selected, businesses should negotiate fees to ensure that they are getting a fair price for the services provided. By discussing the scope of the audit, the expected timeframe, and the specific deliverables required, businesses can work with the auditor to establish a fair price for the services provided.
- Use technology to streamline the audit – Leveraging technology can help to streamline the audit process and reduce costs. For example, implementing software to manage documentation and automate processes can help to minimize the time required from the auditor and reduce overall costs.
By taking these steps to manage SOC 2 audit costs, businesses can achieve compliance with the TSC without breaking the bank. It’s important to work closely with the auditor and establish clear expectations and deliverables to ensure that both parties are working towards the same goals.
A SOC 2 audit can provide significant benefits for organizations looking to demonstrate their commitment to security and privacy. However, it is important to be aware of the potential costs involved in the audit process. By understanding the factors that contribute to the overall cost of the audit, organizations can work with their auditor to manage costs and ensure that they are getting the best possible value for their investment.