Data has changed the way business operates. Users are concerned about their data and how it is being used. This has made it important for companies to work on ensuring that their data is protected. A compliance standard that deals with the same are the Service Organization Control 2 reports. Even though they are not regulated, they are considered important for businesses, especially if they handle customer data.
In this SOC 2 guide, you will learn about the basics of SOC 2 compliance and everything else you need to know about it:
What is SOC 2?
Developed by the AICPA or the American Institute of CPAs, SOC 2 is an auditing procedure that ensures a business handles its customer’s data securely. This helps protect the privacy of the customers as well as the organization.
But, you might ask, “Who needs SOC 2 compliance?”.
If your business works with customer data, you have to perform SOC 2 audits regularly to make sure that you meet every criterion. Once you have passed the audit, you will receive the SOC 2 certification that lets your client know about the SOC 2 compliance requirements.
Who performs a SOC 2 audit?
The AICPA has certain professional standards that all SOC auditors must adhere to. SOC audits can only be performed by CPA (Certified Public Accountant) organizations or independent CPAs. There are certain guidelines that all the auditors have to follow to plan, execute, and supervise the audits. All the AICPA members also have to undergo peer review to ensure that they perform the audits as per the given standards.
What are the trust principles covered by the SOC 2 audit?
The SOC 2 audit covers the following five trust principles:
Security
This principle measures how you protect your systems and data from information disclosure, damage to the systems, and unauthorized access. Your SOC 2 controls list must protect the privacy, confidentiality, integrity, and availability of the information you take from your customers and store.
Availability
For this trust principle, the audit covers whether or not your systems and information are available for use and operation in accordance with the objectives of your company.
Processing integrity
This principle tests if you have accurate systems processing that ensures the processing of authorized information.
Confidentiality
In this trust principle, the auditor will cover whether or not you protect confidential information.
Privacy
This principle takes a look at how you collect, use, disclose, retain, and destroy the data and whether or not it is in accordance with your privacy policies.
What is the difference between SOC 2 Type 1 and SOC 1 type 2?
The SOC Type 1 report evaluates your controls at a certain point in time. The auditor will assess the design of the controls and confirm the implementation. However, this report doesn’t evaluate your consistent performance.
The SOC Type 2 report covers how effective your controls have been over a certain period of time. Apart from everything that is evaluated in the type 1 audit, it also covers whether or not you have had consistent controls throughout a certain duration like a six or 12-month period. This helps increase the level of trust and confidence your business partners and customers have.
How can you prepare for a SOC 2 audit?
In order to prepare for a SOC 2 audit, here are a few things to do in advance:
1. Collect documentation
You have to start by collecting all the documentation regarding compliance in one place. Now, the documentation and evidence you need will depend on which trust principle you are auditing for. You can take the help of SOC 2 compliance software that allows you to store and access the documentation you need quickly and efficiently.
2. Complete the readiness assessment
Before the real audit, the auditor will perform a readiness assessment. You can use this assessment to prepare for the audit. Take this as an opportunity to make sure that your auditor doesn’t find any big issues in your compliance and security programs. It can also help you let your stakeholders understand why IT security and data compliance measures are important for the company.
3. Meet with the auditor
Before the actual audit, you should meet with your auditor. It will give you a chance to create a SOC 2 questionnaire and clear your doubts. You can also ask them whether a specific control is up to the standards. The more time you spend preparing for the audit, the smoother your audit process will be. Being prepared will decrease the likelihood of getting a failed audit.
What happens during the audit?
Depending on the principles that you are audited for, a SOC 2 audit will involve testing the efficacy of your security controls. For this, the auditor will review the documentation and evidence that you have submitted. You will have to submit documents electronically, including asset inventories, change management processes, organizational charts, onboarding/offboarding processes, etc. They might even interview your company’s stakeholders to get an understanding of the operating procedures and internal processes of your company. The whole process can take a few weeks.
How can you comply with the SOC 2 compliance?
Usually, SOC 2 audits cover a period of 12 months. However, some companies prefer bi-annual audits. Once you have received the certification, you will have to finish the maintenance activities. You can automate the whole process to maintain SOC 2 compliance. If there are several manual processes, there is a chance that you might miss out on compliance activities, such as procrastinated responsibilities and out-of-date evidence.
SOC 2 compliance can show businesses that they have effective protocols and security controls in place. It makes you trustworthy and gives you an edge over your competitors.