- SOC 2 is a security compliance audit that evaluates an organization’s controls over customer data.
- It assesses an organization’s controls over the security, availability, processing integrity, confidentiality, and privacy of customer data.
- SOC 2 audits are conducted by independent third-party auditors using the standards established by the American Institute of Certified Public Accountants (AICPA)
- SOC 2 targeted service company (SaaS) primarily in The United States
As the number of cyber threats increases, enterprises are being asked to prove that they have effective measures in place to protect their clients’ data. Demonstrating compliance with SOC 2 Type 2 is the best way to do this, but there are many steps that must be taken to achieve it. For beginners in the enterprise field, understanding the importance of compliance is one thing, but understanding the methods to achieve compliance is a different matter altogether.
Achieving SOC 2 Type 2 compliance requires a significant investment of time, effort, and resources. It is not a standardized process where one can simply connect the dots from point A to point B. Instead, it involves a comprehensive evaluation of an enterprise’s security controls, policies, and procedures. Nevertheless, before diving into the details of the SOC 2 Type 2 compliance process, it is essential to start with the basics.
Understanding SOC 2
SOC 2 compliance is a framework developed by the American Institute of Certified Public Accountants (AICPA) for evaluating and reporting on an organization’s controls related to data protection and service reliability. SOC 2 reports provide assurance to customers and partners that an organization has implemented effective controls to safeguard their data.
This kind of framework is based on five trust service categories: Security, Availability, Processing Integrity, Confidentiality, and Privacy. These categories are based on the AICPA’s Trust Services Criteria and represent the key areas that organizations need to focus on to protect customer data and ensure the reliability and security of their services.
SOC 2 compliance requires organizations to undergo an audit by an independent third-party auditor. The auditor evaluates the organization’s controls based on the trust service categories and issues a SOC 2 report that provides assurance to customers and partners that the organization has effective controls in place. SOC 2 compliance is an ongoing process that requires organizations to continuously monitor and maintain their security and compliance posture. This includes regular testing and monitoring of controls, as well as ongoing training and awareness programs for employees.
Overall, SOC 2 compliance is an important framework for organizations that handle sensitive data or provide critical services to their customers. By achieving SOC 2 compliance, organizations can demonstrate their commitment to protecting customer data and maintaining a secure and reliable service environment.
SOC 2 Type 1 and Type 2: Are both just the same?
Basically, both SOC 2 Type 1 and Type 2 reports are important for assessing an organization’s internal controls. However, they differ in terms of the scope and duration of the assessment, as well as the level of assurance provided by the report. A Type 1 report provides a snapshot of an organization’s controls at a specific point in time, while a Type 2 report provides ongoing assurance by evaluating the effectiveness of controls over a period of time.
Both reports have their own unique uses and benefits, and organizations may choose to pursue one or both depending on their specific needs and goals. Check the table below to get the specific differences between the two type of SOC 2:
|SOC 2 Type 1||SOC 2 Type 2|
|Point-in-time assessment||Assessment over a period of time|
|Evaluates the design and implementation of controls||Evaluates the design, implementation, and effectiveness of controls|
|Provides an assessment of controls as of a specific date||Provides an assessment of controls over a specified period of time|
|Covers a shorter period of time (usually a few months)||Covers a longer period of time (typically 6-12 months)|
|May be conducted as a standalone assessment or as a precursor to Type 2||Typically follows a Type 1 assessment and is used to demonstrate ongoing compliance|
|Helps organizations identify areas where improvements are needed||Helps organizations maintain and improve existing controls|
|Useful for assessing the suitability of a vendor or service provider||Useful for demonstrating compliance to customers and stakeholders|
SOC 2 Requirements
In order to assess an organization’s internal controls, SOC 2 compliance requires organizations to meet five key trust service categories: Security, Availability, Processing Integrity, Confidentiality, and Privacy. Below is an overview of each requirement:
This requirement involves protecting against unauthorized access to data and systems,
including physical and logical access controls, network security, and vulnerability management. It also includes monitoring for and responding to security incidents and implementing appropriate security policies and procedures.
This requirement involves ensuring that services and systems are available for use as agreed upon with customers. This includes ensuring adequate system redundancy, business continuity, and disaster recovery planning.
This requirement involves ensuring that processing is complete, accurate, timely, and authorized. This includes implementing controls to prevent errors, omissions, and unauthorized alterations to data.
This requirement involves protecting sensitive information from unauthorized disclosure. This includes implementing access controls, encryption, and data classification policies to safeguard data and systems from unauthorized access.
This requirement involves protecting personal information in accordance with applicable privacy laws and regulations. This includes implementing controls to protect the privacy of individuals’ personal information, such as access controls, data encryption, and data retention policies.
Meeting these requirements requires a comprehensive approach to information security and risk management, including policies, procedures, and controls designed to safeguard data and systems from a wide range of threats and risks.
How to achieve SOC 2?
Achieving SOC 2 compliance requires a comprehensive approach to information security and risk management. Below are the notable steps an organizations can take to achieve SOC 2 compliance:
- Preparing for a SOC 2 audit:
The first step in achieving SOC 2 compliance is to prepare for a SOC 2 audit. This involves understanding the SOC 2 requirements, identifying the scope of the audit, and preparing documentation and evidence to support the audit.
- Hiring a SOC 2 auditor:
Once an organization has prepared for a SOC 2 audit, the next step is to hire a qualified SOC 2 auditor. The auditor should be experienced in performing SOC 2 audits and have a thorough understanding of the SOC 2 requirements.
- Conducting a readiness assessment:
Before undergoing a SOC 2 audit, organizations should conduct a readiness assessment. This involves performing a gap analysis to identify areas where the organization needs to improve its security and compliance posture. It also involves testing the organization’s controls and identifying any weaknesses that need to be remediated before the SOC 2 audit.
- Remediation and ongoing compliance:
After identifying any gaps in the organization’s security and compliance posture, the organization should remediate any weaknesses and implement controls to address the gaps. Once the remediation is complete, the organization should continue to monitor and maintain its security and compliance posture to ensure ongoing SOC 2 compliance.
To achieve SOC 2 compliance is an ongoing process that requires ongoing monitoring, testing, and maintenance. By following these key steps, organizations can achieve SOC 2 compliance and demonstrate their commitment to protecting customer data and maintaining a secure and reliable service environment.
Benefits of SOC 2
So, after finishing all the steps discussed above, what will an organisation obtain from SOC 2? To mention a few, here is some benefits of SOC 2:
- Increased customer trust: SOC 2 compliance can help service organizations demonstrate their commitment to protecting customer data and meeting their obligations under relevant regulations and industry standards. This can help build trust with customers and differentiate the service organization from competitors.
- Competitive advantage: SOC 2 compliance can be a competitive differentiator for service organizations, especially in industries where data security and privacy are major concerns for customers.
- Risk mitigation: SOC 2 compliance can help service organizations identify and mitigate risks to their operations and reputation. By implementing effective controls and undergoing regular audits, service organizations can reduce the risk of data breaches, downtime, and other incidents that could harm their business.
- Cost savings: SOC 2 compliance can help service organizations avoid costly fines and penalties for noncompliance with relevant regulations and industry standards. It can also help prevent the need for expensive remediation efforts in the event of a data breach or other incident.
Achieving SOC 2 compliance can be a significant undertaking, but the benefits are well worth the effort. Not only does it improve an organization’s security posture, but it also provides a competitive advantage by demonstrating to customers and partners that their data is protected. SOC 2 compliance also helps organizations meet regulatory requirements and can mitigate the risk of reputational damage in the event of a data breach or security incident.