SOC 2 is a security and compliance standard that offers guidelines for service organisations to protect sensitive data from unauthorised access, security incidents, and other vulnerabilities. Part of the System and Organisation Controls (SOC) suite of services developed by the American Institute of Certified Public Accountants (AICPA), the System and Organisation Controls 2 (SOC 2), has been designed to provide auditors with guidance when evaluating the operating effectiveness of an organisation’s security protocol.
Scope of a SOC 2 report
A SOC 2 audit report is a document that verifies an organisation’s SOC 2 compliance and focuses on a business’ non-financial reporting controls.
SOC 2 compliance is important for service organisations that handle customer data in the cloud, such as software as a service (SaaS) providers, cloud-computing providers, and data centres. It demonstrates to customers and stakeholders that the organisation has a strong commitment to information security and data protection. It also helps them meet the regulatory requirements and industry best practices for data security.
The criteria for managing customer data are based on five principles:
- Security;
- Availability;
- Processing integrity;
- Confidentiality; and
- Privacy.
The above principles are outlined in the Trust Services Criteria (TSC), and are industry recognised, third-party control criteria for auditing service providers. Each of the criteria have defined requirements that need to be met and implemented within the organisation to demonstrate compliance.
SOC 2 audits are divided into:
- Type I – an audit carried out on a specific date; and
- Type II – an audit carried out over a specific period.
Type I reports assess the business’ internal security controls at a single point in time and the auditing firm will evaluate whether the current security controls are sufficient for protecting sensitive data and whether they meet the applicable TSC requirements.
On the other hand, Type II audit reports evaluate how well a service organisation’s controls perform over a period of time, with a typical audit window of 3-12 months.
Best practice
Unlike some other security standards, SOC 2 reports are unique to each organisation. Each service provider designs its own controls to comply with one or more of the trust principles, depending on the nature and scope of their services. An independent auditor then evaluates the effectiveness of those controls and issues a SOC 2 report.
Whether an organisation is using, storing, accessing, or processing customer data, it is considered best practice to be compliant with a cybersecurity standard like SOC 2 or ISO 27001. Completing the SOC 2 audit process will help to meet customer’s expectations and protect sensitive information from data breaches.
There is no legal requirement to have a SOC 2 report. However, it is common within the industry for clients and potential customers to request a SOC 2 report before engaging with a service organisation. Even if meeting the SOC 2 requirements is not a significant hurdle, prospects who are comparing similar service providers are likely to see a SOC 2 report as a differentiating factor when making their selection.
Ultimately, SOC 2 has gone from being a competitive advantage in the sales process to being table stakes for information security.
Benefit of a SOC 2 report
The SOC 2 framework can help strengthen an organisation’s security by pushing it to implement a variety of internal controls, including a formal risk management strategy, regular employee training, policy reviews, and periodic audits. These can all improve the way the entire organisation thinks by being proactive in terms of their cybersecurity risk management.
Crucially, it often uncovers operational inefficiencies such as conflicting policies, redundant tools, and outdated software. Preparing for and undergoing a SOC 2 audit drives organisations to address these issues and build strong, sustainable security processes and policies before security incidents and events occur.
Our Expertise – Your Assurance
Navigating the intricate landscape of SOC 2 compliance demands expertise, strategy, and diligence. Our team of seasoned professionals specialises in guiding firms through every facet of the compliance journey. From gap assessments to policy formulation, implementation, and ongoing monitoring, we tailor our approach to your unique needs. Our collaborative partnership ensures you not only meet the SOC 2 requirements but also bolster your overall cybersecurity posture.
Welcome to a world of fortified operations, digital trust, and peace of mind. Discover how our team can empower your firm’s journey towards SOC 2 compliance and a safer, more secure digital future.
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