SOC 2 audits are independent assessments of your company’s cybersecurity posture, and those audits are no walk in the park. Hence it would be wise for your company first to undertake its own SOC 2 readiness assessment: so that you can identify and correct problems before the external auditors find those issues for you.
First, the basics. The System and Organization Controls for Service Organizations 2 (SOC 2) standard is a standard that technology vendors and similar service providers can follow to assure that they have strong data protection and cybersecurity controls.
The SOC 2 framework is based on five “Trust Services Criteria”, developed by the American Institute of Certified Public Accountants (AICPA). Those criteria are:
- Processing integrity
The principles help an auditor determine whether an organization is SOC 2 compliant. Not every principle needs to be included in every SOC 2 audit; an organization only selects those principles that are relevant 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 regime, 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 to 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?
SOC 2 compliance is increasingly essential for organizations, particularly those handling sensitive customer data. Sometimes SOC 2 is required for specific reasons, such as companies trying to meet the privacy mandates of HIPAA (Health Insurance Portability and Accountability Act) and PCI DSS (Payment Card Industry Data Security Standard). That said, the benefits of SOC 2 compliance extend well beyond these requirements.
Enhancing credibility and trust. Achieving SOC 2 compliance sends a strong signal to your customers and partners about your commitment to data security. It demonstrates that your organization has robust and effective controls in place to protect customer data, potentially giving you a competitive edge over those who don’t bother with SOC 2.
Preventing costly data breaches. As the average cost of data breaches soars (more than $4.2 million in 2021), SOC 2 compliance can also be a critical component of your risk management strategy. By adhering to SOC 2 standards, you are actively protecting your organization against the financial and reputational damages caused by data breaches.
Assuring system and network security. SOC 2 compliance requires regular audits and assessments of your organization’s security measures. This continuous evaluation assures that your systems and networks remain secure against evolving threats, thereby safeguarding sensitive data.
SOC 2 compliance is not just about meeting regulatory requirements; it’s a comprehensive approach to assuring data security, building trust with stakeholders, gaining a competitive advantage, and safeguarding your organization from the high costs associated with data breaches. It’s an investment in the security and sustainability of your business in the digital age.
How Does a Company Achieve SOC 2 Compliance?
To achieve SOC 2 compliance, a company must embark on a detailed and methodical process that culminates in the creation of a comprehensive SOC report, which is then subjected to an independent audit. The steps involved in this process are as follows:
Understanding SOC 2 requirements. First a company must gain a thorough understanding of SOC 2 requirements, including the Trust Services Criteria and which ones apply to your specific business.
Internal assessment. Next, conduct an internal assessment to identify the current state of the company’s systems and controls in SOC 2 standards. This step helps to pinpoint areas that require improvement or development.
Developing and implementing controls. Based on the assessment, the company should develop and implement controls that address the SOC 2 criteria. This might include enhancing security measures, establishing data privacy protocols, and ensuring system reliability.
Management’s assertion of compliance. A key part of the SOC report is the management assertion. This is a statement from the company’s management claiming compliance with SOC 2 requirements. It should be well-founded, based on the implemented controls and internal assessments.
Gathering evidence. The company needs to collect evidence demonstrating the effectiveness of the controls in place. This evidence forms an integral part of the SOC report and substantiates the management’s assertions.
Drafting the SOC Report. The SOC report should provide a detailed description of the company’s systems and the controls implemented to meet SOC 2 criteria. It should be comprehensive, clear, and structured to facilitate the auditor’s review.
Independent audit. An independent auditor, typically a CPA (Certified Public Accountant) or a firm specializing in such audits, reviews the SOC report. The auditor assesses the accuracy of the management’s assertions and the adequacy of the controls in place.
Auditor’s report. The final section of the SOC report is the auditor’s report. This includes the auditor’s findings and opinion on whether the company meets the SOC 2 standards.
By following these steps and assuring that all aspects of SOC 2 compliance are addressed, a company can achieve SOC 2 compliance, demonstrating its commitment to maintaining high standards of data security and privacy.
What is a SOC audit readiness assessment?
A SOC readiness assessment is a preliminary evaluation conducted to determine whether an organization is prepared for a formal SOC audit. This assessment helps to identify areas where an organization may fall short of the SOC criteria and allows the business to address these gaps before undergoing the actual audit.
During the readiness assessment, a thorough review of an organization’s internal controls, policies, procedures, and systems is performed, focusing on areas relevant to the SOC standards. The goal is to assure that the organization has adequate measures in place to meet the Trust Services Criteria.
When Should a Readiness Assessment be Performed?
A readiness assessment is best performed at these times:
Before your first SOC audit. Organizations preparing for their first SOC audit should conduct a readiness assessment to understand the requirements and prepare accordingly.
After significant changes. If the organization has seen significant changes in its systems, processes, or controls, a readiness assessment can help assure these changes align with SOC requirements.
Annually for recurring audits. For organizations undergoing annual SOC audits, conducting a readiness assessment each year can help maintain compliance and address any new or evolving challenges.
What to Look for During a SOC 2 Readiness Assessment
During a SOC 2 readiness assessment, organizations should focus on:
The control environment. Evaluate the existing control environment against SOC 2 requirements. This includes reviewing policies, procedures, and practices related to security, privacy, and data protection.
Risk management processes. Assess the organization’s approach to identifying, managing, and mitigating risks, especially those affecting client data and system availability.
Information security. Examine security measures such as firewalls, encryption, access controls, and incident response plans to assure that they are robust and meet SOC 2 standards.
Data privacy and confidentiality. Review procedures for handling sensitive data, assuring that they comply with privacy and confidentiality criteria of SOC 2.
Documentation. Assure that all policies, procedures, and controls are well-documented, as documentation is a critical component of the SOC audit process.
Employee training and awareness. Assess the level of employee awareness and training for SOC compliance, security best practices, and data protection policies.
Vendor management. If third-party vendors are in scope for your audit, evaluate their effect on your organization’s SOC 2 readiness and their compliance with your expectations.
By carefully examining these areas, organizations can identify and rectify any deficiencies, assuring a smoother and more successful SOC audit process.
How Do You Prepare for a SOC 2 Audit?
Achieving SOC 2 compliance will take some time. These 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 Criteria apply to your company, and therefore 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 Much Does a SOC 2 Readiness Assessment Cost?
The cost of a SOC 2 readiness assessment can vary significantly based on factors unique to each organization. Generally, these costs are influenced by the size and complexity of the organization, the scope of the assessment, the current state of the company’s information security practices, and the choice of the service provider conducting the assessment. Here’s a closer look at the factors that can affect cost:
Size of the organization. Larger organizations with more complex systems and processes typically face higher costs due to the increased scope of the assessment. Smaller companies may have fewer controls to evaluate, reducing the cost.
Complexity of IT Infrastructure. The complexity of your IT environment, including the number of systems, applications, and processes that need to be assessed, directly affects the cost. More complex infrastructures require more time and resources to evaluate.
Current state of compliance. If your organization already has robust security practices in place, the readiness assessment may require fewer resources, potentially lowering the cost. Conversely, organizations with less mature security practices may need a more extensive assessment.
Scope of the assessment. The specific Trust Services Criteria that you choose to include will also influence the cost. Covering more TSCs typically increases the assessment’s complexity and cost.
Service provider. The cost can vary depending on the service provider‘s expertise, reputation, and pricing structure. Some providers may offer a flat fee, while others charge based on the assessment’s complexity and duration.
Additional services. If the readiness assessment includes additional services such as consulting or remediation assistance, this will also be reflected in the cost.
On average, a SOC 2 readiness assessment can range from a few thousand to tens of thousands of dollars. To get a more accurate estimate, organizations should consult with several providers to understand the services offered and the associated costs.
Maintain SOC Compliance with ZenGRC
Maintaining SOC compliance is an ongoing process that requires diligent monitoring and management of information security practices. ZenGRC, a governance, risk management, and compliance software solution, streamlines this process, making it more efficient and less burdensome.
With its intuitive interface, ZenGRC offers a centralized platform for tracking and managing all aspects of SOC compliance. It automates the monitoring of controls, assuring that they remain effective and up to date in alignment with SOC standards. The software also facilitates the documentation process, essential for demonstrating compliance during audits.
Additionally, ZenGRC provides valuable insights through its reporting features, allowing organizations to identify areas of non-compliance and address them quickly. By integrating risk assessment tools, ZenGRC helps organizations not only to maintain compliance but also continuously improve their security posture.
This comprehensive approach offered by ZenGRC is invaluable for organizations seeking to uphold SOC compliance efficiently while focusing on their core business operations.