In this digital era, businesses are collecting, processing, transmitting, and storing significant amounts of data. With data breaches becoming so rampant, it’s not just the service providers that are concerned about the safety of their data – customers are too.
To ensure that customer data is being adequately protected, service organizations must incorporate certain compliance standards into their business practices regularly. One such standard is the SOC 2 compliance standard. In this article, we outline what a SOC 2 audit is and the steps to take to navigate this type of compliance audit.
What Is A SOC 2 audit?
Service Organization Control 2 (SOC 2) audit is an auditing process designed to help service organizations that handle customer data to demonstrate that they have put security controls in place to secure their customers’ data. The SOC 2 audit is usually completed by an outside auditor, and not just any auditor, but an accredited CPA. If the business passes the audit, it is issued with a SOC 2 certificate that proves its compliance.
You’re probably wondering, is SOC 2 mandatory? Well, SOC 2 is a voluntary compliance framework that isn’t enforced on businesses by any state or federal regulators. While this compliance isn’t legally required, businesses that handle consumer data should seriously consider becoming SOC 2 compliant.
What Is The Scope Of A SOC 2 Audit?
The scope of the SOC 2 audit revolves around five Trust Service Categories, previously known as Trust Service Principle. They include:
- Security: This category evaluates the efficacy of the policies that govern the way a business protects its data and systems against unauthorized access. It also evaluates the effectiveness of the policies that govern how a business acts in response to security breaches that result in unpermitted disclosure of information.
- Availability: This category evaluates the availability of information and systems and whether they are used for purposes of meeting the entity’s objectives.
- Confidentiality: This category evaluates whether information that’s identified as confidential is adequately protected against unauthorized access.
- Processing Integrity: This category evaluates the completeness, validity, and accuracy of your system processing.
- Privacy: This category evaluates the efficacy of the policies that govern the way the users’ personal information is collected, used, disclosed, and discarded. Not only should your business undertake these processes in accordance with your company’s privacy policy, but they must be undertaken in accordance with the Generally Accepted Privacy Principles (GAPP).
Steps To Navigate A SOC 2 Audit
If you know that you’ll be involved in selling technology services to customers and will be collecting, processing, storing, or accessing sensitive customer data, you should work on becoming SOC 2 compliant earlier on in your business’ journey. Starting early on will give you the chance to entrench security controls into your offerings at the development stage. Doing so will be a far easier undertaking than having to entirely re-structure the system later to conform to the required security standards. The following are the steps to take to navigate a SOC 2 audit:
- Determine the scope of your SOC 2 Audit
Every SOC 2 audit doesn’t have to include all five trust principles because all of them may not apply to every organization. For instance, if your business only stores customer data and doesn’t engage in any data processing, you do not need to subject your business under the Processing Integrity audit. Similarly, you don’t need to undergo the Confidentiality audit if you do not store confidential data.
In that regard, the first step is to determine the scope of your SOC 2 audit, which should be guided by what’s most important to your customer base and their main concerns. As a general rule, systems that are fundamental in delivering your core service should be subject to more meticulous controls compared to those that aren’t critical to delivering your core service.
Remember that including either too much or too little in your scope of SOC 2 audit might turn out to be detrimental. If you take a broad approach, you’ll end up wasting too much valuable time on procedures and processes you don’t need. If you take a narrow approach, you may miss out on the things that matter to your customer base and risk spending more time and money on remediation measures.
- Establish key processes and procedures
After determining the scope of your SOC 2 audit, the next step should be to establish key processes and procedures. For instance, you need adequate IT security processes to ensure proper handling of data. You’ll also need to have enough staff, including IT and security teams that will handle technical tasks before and during the SOC 2 audit.
- Gather compliance documentation
Depending on the trust categories you’re auditing for, you’ll be required to present different compliance documentation for each. To make this process easy, you should consider investing in compliance management software.
- Schedule the SOC 2 Audit
Once all the controls, key processes, key staff, and compliance documentation are in place, it’s time to schedule the SOC 2 audit. Be sure to choose an accredited CPA firm to perform the audit. The American Institute of Certified Public Accountants (AICPA) specifies that only independent CPAs are qualified to perform a SOC 2 audit.
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