Information security is front of mind for most companies today, as data breaches are increasingly common. According to IBM and Ponemon Institute study, The global average cost of a data breach in 2023 was USD 4.45 million, a 15% increase over three years.  

In this high-risk climate, potential clients seek confirmation that they can rely on you to protect their sensitive data. A SOC 2 Type II report is one of the finest methods to offer this assurance.

What is SOC 2?

SOC 2, or the System and Organization Controls for Service Organizations 2, is the framework that determines an organization’s ability to protect personal information and customer data. 

The SOC 2 developer, the American Institute of Certified Public Accountants (AICPA), created the framework in response to the accelerated cybersecurity risks due to technological advances in data security and data processing.

How Does SOC 2 Differ From ISO 27001?

While SOC 2 is a standard form of information security compliance, ISO 27001 is another framework that governs IT risk. ISO, developed by the International Organization for Standardization, contains numerous standards that govern risk assessment processes and security policies.

ISO 27001 is a more rigorous form of compliance, but by achieving ISO compliance, your organization shouldn’t have trouble gaining SOC 2 attestation as well. The ISO framework helps organizations establish an Information Security Management System (ISMS), a process that can often take up to three years to develop. 

Even though ISO 27001 is a more rigorous set of standards, it can still be helpful for an organization to seek SOC 2 compliance because of some significant differences.

What are Other Versions of SOC Compliance?

While SOC 2 primarily focuses on controls around the five Trust Services Criteria, SOC 1 and SOC 3 deal with different areas of an organization’s business procedures.

SOC 1 is concerned with internal controls dealing with financial reporting, while SOC 3 shares an identical set of reporting standards as SOC 2. However, SOC 3 reports are publicly available to anyone, while SOC 2 is confidentially shared only with stakeholders and industry regulators.

Why Seek SOC 2 Compliance?

Cloud computing has revolutionized how many companies conduct business. While it’s led to groundbreaking advances in how service providers operate, it’s also led to security issues around customer and client data. SOC 2 compliance helps assure stakeholders that your organization follows regulatory standards for information security and processing. 

How Does a Company Gain SOC 2 Attestation?

To attain a clean SOC 2 report, a company must have a Certified Public Accountant (CPA) attest that security measures are in place. 

There are two types of SOC 2 reports: Type I and Type II. Type I SOC 2 must show that internal controls are in place and designed effectively. Type II requires that a company establish its controls are in place and have been operating effectively over a period of time. 

Once a company’s senior management has decided that internal controls are in place to meet the required SOC 2 criteria, a CPA firm will then conduct a SOC audit to confirm or deny that the company has achieved full compliance.

Defining the Scope of the SOC 2 Type 2 Report

Once an organization passes its audit, it receives a SOC report outlining how its internal controls demonstrate its ability to provide its service securely. 

Each SOC 2 report will be unique to an organization and vary depending on which of the five Trust Services Principles are assessed through the audit. The five criteria include security, availability, confidentiality, processing integrity, and privacy. 

Your organization’s functions will help determine which of the five criteria apply. Then, internal controls will be assessed to ensure your organization’s policies and procedures help maintain the relevant trust criteria.

The SOC 2 report structure consists of an opinion letter from the auditor, management’s assertion of compliance, the description of the system being reviewed, and the description of tests of controls and the results of that testing.

What is the Difference Between SOC 2 Type 1 and Type 2?

A SOC 2 Type 1 report details your internal control rules and their fit for purpose at a specific time. On the other hand, a SOC 2 Type 2 report tests such systems over time (usually six months).

Both evaluations need the creation of system descriptions, control mapping, research, and the performance of risk assessments for each area. Then, in a SOC 2 Type 2 examination, auditors do fieldwork for weeks or months to examine controls, pick samples, and test procedures.

How Much Does a SOC 2 Audit Cost?

The typical SOC 2 Type II auditing costs between $10,000 and $60,000. The cost will be determined by factors such as:

  • The number of Trust Service Criteria that apply
  • Your control environment’s size and complexity
  • The number of applications in scope
  • The total number of workers and physical locations audited
  • The degree of assistance required throughout

When you factor in preparation, the cost of time and resources is significant. SOC 2 assessments can also have hidden expenses, such as completing a readiness assessment, repairing security vulnerabilities with new tools and solutions, and training employees on new rules.

These expenses repeat since SOC 2 Type 2 assessments must be done annually. Beginning with a readiness assessment and documenting processes can help you save money.

How to Prepare for Your SOC 2 Audit

To ease the SOC 2 audit process, organizations aiming for SOC 2 audit and evaluation should have a solid security program with organizational and technical protections in place. Well-prepared organizations will face less scrutiny and acquire SOC 2 certification much faster.

When preparing for a SOC 2 audit, organizations should keep the following best practices in mind:

Create Up-to-date Administrative Policies

Administrative policies and Standard Operating Procedures (SOPs) are essential for any security program. Teams should develop administrative procedures appropriate for their personnel organization, technology, and daily workflow. These rules must be written in straightforward language so they can be understood by your employees rather than as formal paperwork.

Security policies should specify how security measures are deployed throughout your apps and infrastructure and the general methods for managing workplace security.

Once your team has implemented administrative policies, review them regularly and update them when processes change. As proof of your security program, teams can share security rules with SOC 2 auditors.

Set Technical Security Controls

Following your team’s development of administrative security rules, you must strive to ensure that technical security controls are in place throughout your apps and infrastructure. This implies that your team should put cloud security rules that correspond to your policy in place.

Teams should consider building security rules and adopting solutions that revolve around the following:

  • Access Control
  • Firewall and Networking
  • Encryption
  • Backup
  • Audit Logging
  • Intrusion Detection Systems (IDS)
  • Vulnerability Scanning

Gather Documentation and Evidence

To ensure a smooth audit process, your team should compile all necessary materials, evidence, and paperwork before arranging a SOC 2 audit. Teams should collect the following documents:

  • Certifications and Agreements for Cloud/Infrastructure: Gather any agreements, certifications, and attestations relating to cloud and infrastructure, including papers such as:
    • Report on SOC 2 Compliance
    • Business Associates Agreement (BAA)
    • Service Level Agreements (SLA)
  • Administrative Security Policies: Gather and distribute all policies on your security program.
  • Documentation of Technical Security Measures: Gather any evidence and documentation related to the deployment and administration of infrastructure security measures.
  • Contracts with Third Parties and Vendors: Gather documents related to third-party firms, contractors, and service providers.
  • Risk Assessment and Audit paperwork: Gather and share any existing paperwork from past security assessments or create new material.

Schedule an Audit with A Reputable Auditing Firm

After your team has built your security program and prepared for a SOC 2 assessment, it is time to work with a trustworthy auditing company. Teams should search for a company that has worked with organizations of comparable size, has performed SOC 2 audits, and has the security skills to conduct a reasonable SOC 2 audit process.

How Long is a SOC 2 Type 2 Report Valid for?

The SOC 2 report is valid for one year after its release date. Any more than a year old report gets “stale” and has little value to potential buyers.

As a result, the golden rule is to have a SOC audit performed every 12 months. 

However, the yearly audit norm is not set in stone. You can do the audit as frequently as you make significant changes to the control environment. For example, if your service business is concerned about cybersecurity controls, you may have SOC 2 Type II audits done every two years. 

Remember that your consumers are paying attention to how regularly you schedule SOC 2 reports. Any inconsistency in scheduling might indicate a lack of commitment to SOC 2 compliance. 

Meet Your SOC 2 Compliance Goals with ZenGRC

Obtaining a SOC 2 report is time-consuming yet vital for any service organization that relies on cloud computing. By establishing strong internal controls and using a SOC 2 framework as a guide for developing safe business policies, your organization can operate confidently in an increasingly digital age.

By eliminating laborious manual processes, streamlining onboarding, and keeping you updated on the progress and effectiveness of your programs, ZenGRC, a compliance and audit management system, offers a quicker and more seamless path to compliance.

ZenGRC gives you the visibility you need to assess the progress and performance of your compliance initiatives and their impact on risk reduction. An audit overview report describes the frameworks, requirements, and controls under consideration, the actions to be completed, and the current audit status.

With seamless connections with platform tools, you get a single, real-time picture of risk and compliance, offering the context-specific perspective required to make intelligent, strategic decisions that keep your firm secure and win the trust of your customers, partners, and workers.

An automated and integrated reference database will help you stay ahead of the ever-changing regulatory environment. RiskOptics enables you to:

  • Become audit-ready in less than 30 minutes
  • Reduce staff workloads through collaboration and automated workflows.
  • Learn how to allocate resources by understanding the impact of compliance actions on your cyber risk posture.

Schedule a demo today to learn how ZenGRC can streamline your audit process.