SOC Compliance 2
In today’s market, SOC 2 has become a table steak. Ensuring the safety of existing customers, selling to new corporate customers and gaining traction on the market is essential.
The problem is that the amount of information available on SOC 2 compliance is overwhelming to say the least. Finding reliable information about how to get certified can seem like a difficult battle.
Well, we’re here to fill that gap. In this article, you’ll find an overview of everything you need to know to get started with SOC 2, all in one place. And straight from our team of SOC 2 experts and previous SOC 2 auditors.
What is SOC 2?
Systems and Organization Audit 2 is an auditing process that evaluates a company’s ability to securely manage the data you collect and use in your day-to-day business operations.
By conducting an audit, you show that customers can trust your company with their data. In short, this is your license to sell.
When preparing for an audit, you will need to implement rules and controls. Controls ensure the security, availability, and integrity of the processing systems that hold your company’s data. For example, controls include ensuring former employees no longer have access to customer data or encryption of sensitive data such as healthcare information. You will also need to gather evidence to demonstrate to the auditor that your controls are working as intended.
Because every company is different, the rules, controls and evidence required to meet SOC 2 requirements will vary from company to company.
Find out more about what SOC 2 is in this SOC 2 U video, our free, expert SOC 2 On Demand course.
Find out more about the course here.
Who should get SOC 2?
SOC 2 is not mandatory in any industry. For example, unlike HIPAA.
However, any business that handles and stores customer data should strive to comply with SOC 2.
Why? Data breaches and attacks against cybersecurity are more frequent than ever. SOC 2 indicates that your organization has safe practices and protects confidential information in your current environment.
Therefore, companies of all sizes and at every stage must adhere to SOC 2 and even more advanced security structures. SOC 2 can act as a sales advantage, especially for SaaS SMBs, as it proves that you are a trusted business partner.
SOC 2 Type 1 vs Type 2
If you are SOC 2 compliant, you will have to choose between a type 1 or type 2 audit. Here are the main differences:
Type 1
Type 1 SOC 2 audit provides quick insight into company data, security and privacy practices at any time. Preparation for a type 1 audit can take 3 to 4 months, but the audit itself usually takes less than 1 day.
Temporary system audit and security control.
It shows that you understand best security practices and are working on their implementation.
The auditor just needs to see that you have designed the appropriate controls.
Your type 1 report can be useful in generating security and certification documentation for potential clients in a relatively short amount of time. It ensures a good susceptibility control of the type 2 prosecutor’s office, proving that not only have appropriate control mechanisms been implemented, but also operationalized.
Type 2
Type 2 audit is a much more comprehensive, longer and more expensive version of the former.
Looks like the same controls as Type 1 but within 6-12 months.
The observation period is longer as the auditor has to verify that you have designed AND operationalized the appropriate controls.
The auditor can take samples at random and confirm that you meet the requirements.
To maintain a type 2 approval you must perform an annual audit.
However, after passing a type 2 SOC 2 audit, it is relatively easy to maintain. This allows you to easily prove that your policies and practices are safe for old and new customers.
SOC 3 vs SOC 2
You may have heard of SOC 3, which is different from SOC 2. Although SOC 2 is much more common than SOC 3, one is no better than the other. Each certificate just has different functions for different organizations.
Similarities
SOC 3 is almost the same as SOC 2 in terms of control. Auditors do the same job for both SOC 2 and SOC 3.
Differences
Compared to SOC 2, SOC 3 certification for B2B companies is not as useful as it does not provide any details and audit results that have been tested by an auditor. In other words, it doesn’t show how you protect your business partner’s data. The SOC 3 report only presents the auditor’s opinion on what you did during the audit.
When most potential clients, especially large companies, do due diligence, they want you to demonstrate how secure your processes are. That’s why most potential customers don’t good security practices at a high level.
SOC 2 or SOC 3? Or both?
As with most information security stuff, it depends. But get SOC certification that your customers have explicitly asked for.
This does not mean that you should blindly follow customer requests. You also need to make sure that you choose the certification that makes the most sense for your business.
Therefore, finding the right auditor is crucial. They can talk to the client to clarify which certification is really needed AND set expectations in advance of what certification would meet both their requirements and the organization’s capabilities.
What is an SOC 2 audit?
An SOC 2 audit is an independent review of security and control policies that certifies that they are operating as intended. Your chosen auditor will be your chosen certified accountant (CPA).
As part of this process, an auditor will review your SOC 2 report. This report documents the controls that ensure the security, availability, and integrity of data processing by your systems, as well as the confidentiality and privacy of the data itself.
See a sample report here.
Preparing for an audit can be difficult as the process is not universal. The path of each company or startup to SOC 2 is different. How your organization can meet the requirements largely depends on the specifics of your business, such as size, industry and function.
Who manages the SOC 2 audit process?
The American Institute of Chartered Accountants (AICPA) has developed SOC 2 and the CPA member will administer and control.
The reason why an accountant reviews security mechanisms and not, say, an IT security specialist, is because of an objective third party. Accountants also have the credentials needed to conduct audits and certify results.
What are the 5 criteria for trust services?
After you’ve selected the type of audit you will perform, it’s time to choose your trust service criteria.
Prior to the audit, your organization will evaluate and report the information and systems you use to support the five Trust Services Criteria.
Hear from Chika Nwajagu, senior information security manager at Tugboat Logic and former information systems auditor at Union Bank of Nigeria. In this video, he discusses the 5 Trust Service criteria.
Why is SOC 2 important?
Continuous SOC 2 compliance is critical to establishing and maintaining trust between your company and your customer base. Here are some reasons why SOC 2 is so important:
SOC 2 is a competitive advantage
It is very likely that your competitors already have or are working on SOC 2. With SOC 2, they are going through the due diligence phase of the sales cycle faster than you are. As we all know, time is money, and this could be the reason why a potential customer chooses competitors’ services over yours.
SOC 2 is an investment that pays off
SOC 2 is expensive. But here are some benefits:
Increase the number of customers. Customers will see that you are following best security practices and taking the necessary steps to protect their data and information.
Shorter sales cycles. Your sales team can use the SOC 2 report instead of wasting engineering team hours filling out security questionnaires.
Improved internal security culture. When your business goes through the SOC 2 process, safety becomes everyone’s responsibility. Especially considering that SOC 2 Type 2 certifications ensure that safety practices are continuously maintained.
SOC 2 will take care of your safety
It is tempting for many startups at an early stage to take security as an afterthought.
Safety certifications such as SOC 2 force key players such as engineers and directors to participate in increasing safety awareness. As team members involved in the SOC 2 process, they will have to provide evidence that their processes are safe.
How long does it take to get SOC 2?
It is difficult to define a specific timeframe for the compliance process as each organization is unique and SOC 2 is a flexible framework rather than a rigid and quick set of rules that must be followed. Each organization has a different starting point and each will choose to interpret and apply the Trust Services Criteria in its own way.
However, based on our experience, guiding hundreds of companies through SOC 2, we can provide you with an extensive schedule as a benchmark.
You may have seen ads for SOC 2 compliant software that say you can get SOC 2 in 2 weeks thanks to automation and integration. Unfortunately, this is simply not true.
Also Read: Why is the Open-Source NLP API Important?
