What Is A Soc 2 Audit And Does Your Business Need It?
Data storage and management are becoming increasingly important for modern businesses. With 45% of US companies have experienced a data breach, the security of sensitive data is a concern for more than just end users.
Service Organization Control 2 (SOC 2) reports are one of the emerging compliance standards for verifying data security. SOC 2 standards aren’t mandated by law or regulation, but they’re nonetheless crucial for any company that deals with sensitive consumer information.
In this post, we will discuss the fundamentals of SOC 2 to help you understand whether your business needs a SOC 2 report.
What Is SOC 2?
SOC 2 is an auditing technique designed by the American Institute of CPAs (AICPA) that assures your company or application is managing customer data safely and in a way that protects your business and your customers’ privacy.
Companies that store or process consumer information should undergo a SOC 2 audit to guarantee they comply with the standard. If an organization successfully completes a SOC 2 audit, the auditor will provide a SOC 2 report attesting to the organization’s compliance with the standards.
A SOC 2 audit examines five trust principles:
- Security. It refers to how successfully you prevent theft, loss, and tampering with your sensitive data and the infrastructure that stores it.
- Availability. This trust principle addresses if your data and systems are readily accessible to meet your company’s goals.
- Processing integrity. This concept evaluates your system’s completeness, accuracy, and allowed data processing.
- Confidentiality. This refers to whether or not material classified as confidential is safeguarded as you claim.
- Privacy. This last trust principle examines how your company’s privacy notice and the Generally Accepted Privacy Principles (GAPP) handle consumers’ personal data.
Elements of a SOC 2 Audit
While SOC 2 audits can vary from business to business, most of them usually include a few fundamental parts. Such as:
- An opinion letter
- Management assertion
- A thorough description of the system or service
- Information about the specified trust service categories
- Results from testing procedures and assessments of controls
- Additional details.
SOC 2 Type 1 and Type 2
SOC 2 audits are classified into two types: Type 1 and Type 2. The main distinction between the two types of audits is that Type 1 focuses on the initial planning and implementation of a security process or procedure at a single point in time. Type 2, on the other hand, evaluates the ongoing effectiveness of the same process.
Who Should Get SOC 2 Certification?
As we discussed previously, neither SOC 2 nor its certification is needed by law or by any technological means. It is common for certification to be a precondition for securing vendor contracts. So B2B and SaaS companies should give it significant thought if they aren’t currently certified.
Due to its widespread acceptance and usage, a SOC 2 report may be required by certain procurement and security departments before they will sanction the purchase of your product.
Obtaining a SOC 2 report is a great way to demonstrate to your clients and users that you take data security and protection seriously if your company deals with any form of consumer data. SOC 2 compliance certification is useful for various industries, including healthcare, retail, financial services, software as a service (SaaS), and cloud storage and computing providers.
What Role Does SOC 2 Have in Your Compliance Program?
Since it is a voluntary compliance framework and is not forced on companies by any federal or state regulations, you might think that most companies consider it as an afterthought or that they only bother to get the certification when they come across a prospective customer who demands it. However, this is not the case.
As it helps you determine if there are significant holes in your internal controls and if the systems you’ve put in place truly operate, SOC 2 is generally the first compliance framework that B2B businesses seek compliance with. It reveals whether or not your security measures are working and whether or not your staff is carrying out the necessary procedures. SOC 2 is an excellent basis for a compliance program since it addresses so many different facets of security and privacy.
Final Thoughts
Increased client satisfaction, strict security, and a reliable audit and monitoring procedure are just a few of the many advantages of SOC 2. Now that the tools exist to reduce the time and money spent on compliance, SOC 2 is a no-brainer for any cloud service provider.
Nevertheless, businesses must realize that SOC 2 is more than just checking a few boxes. SOC 2 requirements may vary somewhat from company to company, and they’ll become more intricate as your operation grows. To stay SOC 2 compliant as technological and regulatory requirements evolve, companies need a flexible, responsive approach based on the best technologies.
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