Regardless of the size of your business, data security should be of utmost importance. Not only does it safeguard your customers’ private information, but it also shows your company’s ability to handle sensitive data with professional care. As a small business, adhering to industry standards for cybersecurity will give you a competitive edge and instill confidence in your company.
To demonstrate data security, all organizations large and small should seek SOC 2 compliance to ensure cybersecurity and safe storage of customers’ personal information.
Compliance with SOC 2 is voluntary. However, many enterprises will not do business with services providers that have not attained the SOC 2 attestation of compliance from an independent CPA or CPA firm.
But maybe you’re not a big enterprise-yet. What if you’re a startup and you’re not sure where to begin?
For companies of all sizes, SOC 2 security measures are also a form of insurance: a single data breach can cost upwards of $3 million, which can be crippling for smaller organizations. By investing in data security now, your company will safeguard itself against data breaches that could compromise your clients’ information.
If your company is in the beginning phases of SOC 2 compliance, it may seem like a long road ahead to prepare for your audit. While it’s a lengthy process, these tips should help ease the burden of confusion and help you identify gaps in your current cybersecurity system.
How Should a Business Prepare for a SOC 2 Audit?
All businesses preparing for a SOC audit should methodically plan their approach-a failed audit can be more harmful than if you never sought compliance in the first place.
Small business owners should look at types of internal controls that satisfy risk management objectives. For guidance, reference internal controls developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
COSO’s controls have several components including governance and culture, strategy and objective setting, performance, review and revision, and ongoing monitoring of activities. By using the internal control framework, you’ll be protecting your business from the risks that can compromise your information technology.
Along with assessing your security controls, there are several steps that will help your business prepare and carry out its SOC 2 audit.
First, assemble a team within your company to prepare for the audit. The team could include your organization’s Chief Technology Officer (CTO), Chief Information Officer (CIO), and Chief Security Officer (CSO)-or an equivalent position, responsibility-wise.
Consider which of the trust service principles apply to your organization, and determine whether there are any gaps within your current system. Get organized and collect evidence to support the five trust categories detailed below.
Before bringing in the auditor, self-assess your documentation and ensure your organization is ready-it’s far better to delay your audit then to rush into it and fail. Monitor your company’s compliance by setting up security alerts, and when ready, schedule an audit with a Certified Public Accountant; the AICPA stipulates that only CPAs are qualified to perform a SOC 2 audit.
What Does a SOC 2 Audit Include?
The SOC 2 audit process is about proving your organization’s ability to protect confidential information and customer data. The criteria for assessing this ability is outlined in these five Trust Service Categories:
- Processing Integrity
What is a SOC 2 Report?
System and Organization Control (SOC) reports, which must be reviewed and approved by an external auditor, help document internal controls that are relevant to a company’s financial reporting.
The SOC report focuses on controls surrounding the five trust service principles outlined above including information security, availability, processing integrity, confidentiality, and privacy.
There are two types of reports: Type 1 and Type 2. A Type 1 report focuses on the description of a service organization’s system, related control objectives, and the suitability of controls to achieve those objectives as of a specified date.
The key difference between the two types is the period of time each covers. Type 1 is often an organization’s first-ever SOC 2 report, and it looks at internal controls governing data security and privacy at the time of the audit. A Type 2 report discusses the effectiveness of your organization’s information security and privacy controls since your last SOC audit, which typically means one year.
Read more in-depth about SOC reports
How Can Small Businesses Save Money on SOC 2 Audits?
Small businesses looking to save money on SOC 2 audits can seek guidance from the Small Business Administration. The SBA partners with AICPA, and can offer legal compliance tips and cyber-hygiene guidance for companies preparing to undergo an audit.
While it may not be SOC 2-specific, the tips may help your company identify existing gaps in data security so you’re not caught off guard when your auditor comes.
Although not mandated, becoming SOC 2 compliant is highly recommended by industry professionals. It’s also a stamp of approval that your cybersecurity system is intact, and shows your business will not only protect its customers’ private information, but it will also safeguard against costly data breaches that could be devastating for a company.
Need help preparing for your SOC 2 audit? Reciprocity ZenComply can help.
ZenComply, a compliance and audit management solution, delivers a faster, easier and smarter path to compliance, eliminating tedious manual processes, accelerating onboarding and keeping you up-to-date on the progress and effectiveness of your programs.
With seamless integrations with Reciprocity ZenRisk and the Reciprocity ROAR platform, you gain a unified, real-time view of risk and compliance providing the contextual insight needed to make smart, strategic decisions that keep your organization secure and earn the trust of your customers, partners and employees.
Schedule a demo to learn more!