Before undergoing a formal SOC 2 audit, an organization would be wise to complete a SOC 2 readiness assessment. This can ensure a smoother audit by helping your company to identify any gaps in data security before the SOC 2 audit begins.
First, the groundwork. Any enterprise that stores or processes customer data should use a framework for safeguarding that data; the System and Organization Controls for Service Organizations 2 (SOC 2) is one such framework, and is rapidly becoming the standard framework.
The SOC 2 framework is based on five “Trust Services Categories” to determine an organization’s ability to protect customer’s data. Those categories are:
- Security
- Availability
- Confidentiality
- Processing integrity
- Privacy
These principles help an auditor determine whether an organization is SOC 2 compliant. Not every principle is relevant to every SOC 2 audit; an organization only selects those principles that matter to the data you store and process. For example, if your business doesn’t handle personally identifiable information, you can omit the privacy principle from your audit.
The SOC 2 readiness assessment is a process to determine your organization’s level of preparation for the formal SOC 2 audit. The assessment will allow your team to resolve any issues or gaps in your data security, and give you the best chance of success for achieving SOC 2 compliance.
To prepare for your SOC 2 assessment, evaluate your organization’s internal controls and control environment. This will help protect your organization from financial, strategic, and reputational risks; and will help you pass audits by assuring that your business’ basics remain effective and efficient.
Why Do I Need SOC 2 Compliance?
Your organization may be required to undergo a SOC 2 audit if your enterprise is subject to HIPAA and PCI DSS standards for data privacy. More broadly, SOC 2 compliance can bring credibility to your organization’s ability to secure customer data, which can give you a competitive advantage against your market rivals.
SOC 2 compliance can also protect your organization from a costly data breach; in 2021, the average cost of data breaches was north of $4.2 million. This peace of mind will provide assurance that your systems and networks are secure and that your organization takes risk management seriously.
How Does a Company Achieve SOC 2 Compliance?
For SOC 2 compliance, a company must create a SOC report to be reviewed by an independent auditor. The report will contain information including a description of your company’s systems and your management’s assertion of compliance, with evidence included. The auditor’s report will make up the final section of the document.
How Do You Prepare for a SOC 2 Audit?
Achieving SOC 2 compliance will take some time. These seven steps will help your organization get there smoothly.
- Appoint your SOC 2 team members. This team can be composed of your organization’s chief technology officer (CTO), chief information officer (CIO), chief security officer (CSO), chief information security officer (CISO), and chief risk officer (CRO). If you have a compliance officer or IT auditor, those people should be included as well.
- Set your goals. SOC audits can be Type 1, assessing whether security controls are designed appropriately; or Type 2, assessing whether those controls work as intended over time. You’ll need to decide which type is necessary for your business. Also: do you need SOC 2 attestation for a single product, or for your entire company?
- Determine your scope. With your team, evaluate which of the five trust services principles apply to your company, and therefore which ones should be in scope for your audit.
- Organize your materials. Based on the trust services criteria that apply to your company, consider which internal controls are relevant and determine whether they’re effective (usually by testing them). If needed, resolve any gaps and collect documents you may need as proof.
- Self-audit. Take time to assess your documentation in advance, to help fill any gaps prior to your official audit. Failing the audit can be a painful experience for an organization (losing customers, for example), so identify any mistakes beforehand and assure you’re organized throughout the process.
- Keep tabs on your compliance. As you prepare for your formal audit, set up security monitoring and alerts that can assure you remain in compliance.
- Get the SOC 2 audit. Only a certified public accountant (CPA) is qualified to perform your SOC 2 audit, but the CPA may work with an independent SOC 2 specialist for assistance.
How Else Do You Assess Readiness?
Determine your organization’s SOC 2 level of readiness by using the above guidelines. Rushing into an audit won’t help your organization, so use this resource to help establish your SOC 2 readiness assessment.
