When the subject is cybersecurity compliance, the National Institute of Standards and Technology (NIST) is often the first reference that comes to mind. NIST has been around for decades, and its standards for the development of cybersecurity risk management programs are considered the gold standard.
There is, however, another standard that applies to service providers that handle customer data, as well as to those firms’ business partners: the SOC 2 audit.
SOC 2 was developed by the American Institute of Certified Public Accountants (AICPA) as a way to audit and document the effectiveness of a business’ internal processes and cybersecurity controls, to assure that certain customer data is adequately protected against cyber attacks and data breaches.
How do SOC 2 and NIST differ?
The principal difference between the two is that a successful SOC 2 audit leads to an organization obtaining independent documentation that it has achieved SOC 2 compliance — something that may be required by customers, business partners, or (depending on your business) the law.
In contrast, NIST is a voluntary framework that can be applied to a service organization’s IT systems to improve information security and solidify a cybersecurity program. But that doesn’t result in an independent audit report or any other certification of compliance.
Both NIST and SOC 2 are standards that aim to analyze an organization’s internal controls, but they place emphasis on distinct areas of data security.
What is the difference among the different types of SOC reports: SOC 1, SOC 2 and SOC 3?
SOC 1 is a review of financial controls and financial reporting, showing that management’s assertion that all financial data are protected from data breaches and handled in a safe manner is accurate.
SOC 2 is a report completed by an independent auditor showing that an organization’s cybersecurity risk management program as well as IT system and organization controls are effective and adequate.
SOC 3 is similar to SOC 2, in that both review cybersecurity controls. A SOC 3 report, however, ,summarizes the findings of the SOC 2 audit and describes the effectiveness of the controls in place, and how they apply to protect privacy and integrity of the data handled. A SOC 3 report tends to be more general and easier to understand for the public.
Together, SOC 2 and SOC 3 compliance reports are often used to show potential clients that your organization takes cybersecurity seriously. The reports address your cybersecurity objectives, the effectiveness of internal controls, and how committed management is to an organization’s cybersecurity risk management program.
For comparison, the NIST Cybersecurity Framework (CSF) lists best practices, standards, and guidelines to help a company do a thorough cybersecurity examination and risk assessment.
Let’s dive deeper into SOC 2
Developed by the AICPA, a SOC 2 report focuses on a company’s data processing integrity and whether customers’ sensitive information is adequately protected within the company and among its third-party vendors.
SOC 2 is not just SOC for cybersecurity; it focuses on five areas of data handling also known as trust services criteria:
- Privacy: does the organization provide sufficient access controls, such as two-factor authentication?
- Confidentiality: are encryption, firewalls, and other security controls in place and updated?
- Processing integrity: how strong are the company’s internal assessment process and third-party vendor management?
- Availability: how are potential cybersecurity breaches and incidents handled? Are there disaster recovery plans in place that will allow the company to recover and continue to operate if a data breach takes place.
- Security: how effective are the controls put in place to detect intrusion? How effective is the internal cybersecurity reporting framework and its response to security events?
All SOC reports are performed by external auditors as a way to assure that management accurately describes the organization’s cybersecurity risk management and reporting framework.
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