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SOC compliance provides organizations that offer services to other companies with the assurance that they can adequately manage and protect sensitive customer data. By conducting a SOC 2 readiness assessment, companies can evaluate their security policies and procedures against the SOC 2 framework. 

Two main types of SOC compliance audits result in a SOC report: SOC 1 and SOC 2. SOC 1 audits apply to organizations that handle financial data, while SOC 2 focuses on cybersecurity controls and vendor risk management. A successful SOC 2 audit assures clients that an organization has strong controls to secure their sensitive data.

What is SOC Compliance?

A business that provides services to other companies — say, data storage or payroll management — typically needs to assure those customers that the business won’t expose them to undue security vulnerabilities or compliance risks. The two most common ways to provide that assurance are to pass a SOC 1 or SOC 2 audit.

A SOC 1 audit (the acronym for “Service Organization Control”) pertains to businesses that handle customer financial data; the audit seeks to ensure that the company can adequately manage and protect the financial information in its custody. A SOC 2 audit, in contrast, focuses on cybersecurity controls and vendor risk management. Both SOC audits were developed by the Auditing Standards Board of the American Institute of CPAs (AICPA).

SOC 2 reports are “Reporting on Controls at a Service Organization Relevant to Security, Availability, Processing Integrity, Confidentiality, or Privacy.” Those five issues are also called the five trust services criteria or principles.

SOC 2 audits also come in two types—type I assesses whether the relevant controls are appropriately designed at a specific time. Type II then assesses whether those controls work effectively over a defined period.

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Why Are SOC Audits Important?

Your ability to protect customer data from breaches or theft is essential to your clients, so ignoring SOC attestation could drive valuable clients elsewhere. Any organization that has suffered a catastrophic security incident can confirm that the peace of mind from keeping data and IT systems secure is priceless.

A business might balk at first at the notion of investing in a compliance program. That’s short-sighted. A single data breach, on average, can cost more than $3.86 million. So, the potential harm from a breach far outweighs the cost of assuring compliance. As mentioned above, completing a SOC 2 audit can give your organization an edge over competitors since a clean auditor’s report adds to your Organization’s credibility and trustworthiness.

Finally, for organizations responsible for achieving compliance with multiple information security frameworks, SOC audits often dovetail with other frameworks, such as the Health Insurance Portability and Accountability Act (HIPAA), General Data Protection Regulation (GDPR), National Institute of Standards and Technology (NIST), or Payment Card Industry Data Security Standard (PCI DSS).

SOC Requirements At a Glance

Your specific SOC requirements will vary depending on whether you seek attestation for SOC 1, SOC 2, or SOC 3. However, regardless of the standard, preparation is the key to a successful SOC audit.

Before your formal audit, you should spend ample time reviewing your compliance requirements and have supporting documentation validating your efforts.

Here are a few tips from our guide to SOC compliance:

1

Establish your goals.

What is the scope of your audit? It’s crucial to understand what requirements pertain to your business, what level or type of certification you want, and how the requirements apply to your existing sensitive data and systems

2

Conduct a risk assessment and implement the appropriate remediation and security controls.

In addition to understanding which data is sensitive and should be safeguarded, you should consider security measures such as user access controls, strong passwords, firewalls, and two-factor authentication (2FA) for sign-on.

3

Organize your materials.

The next step is to prepare the documents and correspondence that validate the effectiveness of your security controls.

4

Conduct a self-audit.

Before submitting your organization for an official audit, ensuring you’re ready is vital. Otherwise, you face excessive costs when applying for a new audit after failing your first. Suppose you can show the assessor conducting your official audit that you’ve remediated any potential compliance issues or are in the process of doing so. In that case, your organization will be well on its way to achieving official attestation.

5

Get help if you need it.

Let’s face it: Between the various types of SOC compliance, the various trust principles, and the different types of audits, SOC certification can be overwhelming. Moreover, SOC 2 (the most commonly sought SOC audit) is a complex framework that changes frequently. So, getting the help you need to achieve compliance and satisfy stakeholders is essential.

SOC Type 1 vs. Type 2: Key Differences

There are two main types of SOC audits:

SOC 1: Evaluate the design of controls for financial reporting at a point in time.

SOC 2: Validates the effectiveness of security, availability, processing, confidentiality, and privacy controls over some time.

The main differences:

  • SOC 1 pertains to financial controls, and SOC 2 focuses on security and risk management.
  • SOC 1 is a point-in-time audit; SOC 2 examines controls over 6-12 months.
  • SOC 1 results in a report for the service organization, and SOC 2 produces a report for existing and prospective clients.
  • SOC 1 emphasizes compliance with financial reporting standards; SOC 2 aligns with AICPA Trust Services Criteria.
  • SOC 1 is mandatory for service organizations handling financial data; SOC 2 is optional.
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RiskOptics Has Your Solution for SOC Compliance

Completing an external audit against any SOC standard requires considerable time and financial resources, particularly for an organization still using legacy tools and spreadsheets to achieve and maintain compliance workflows.

Also, obtaining the initial auditor’s report is only half the battle. After the auditor has issued their report, your organization must maintain compliance management to ensure the new systems, processes, and controls don’t degrade over time. Re-certification will come up sooner than you think.

At RiskOptics, our compliance experts can help you prepare your SOC compliance and certification program, expedite the process, and minimize the burden on your team.

ZenGRC is an efficient solution to continuous compliance. Businesses don’t have to worry about their compliance stance because the ZenGRC automation platform monitors it over the entire lifecycle and keeps up with the latest data protection regulations and compliance frameworks.

ZenGRC SOC Capabilities

Our fully integrated and automated ZenGRC equips you with a strong foundation for SOC compliance, enabling you to monitor your program over time to ensure you remain compliant and avoid non-compliance penalties. Discover our capabilities:

  • User-friendly dashboard with real-time metrics on prioritized risks
  • Pre-built templates that can help you with your compliance audits
  • A central repository for all audit-ready documentation
  • Universal Control Mapping to streamline multiple requirements with a single control
  • Insight into team member progress at fulfilling SOC requirements
  • Tracking functionality for outstanding service provider requirements
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Frequently Asked Questions

Public organizations in the U.S. are required to provide annual financial statements to their investors. This often requires a SOC report audit process to validate that their business practices and handling of sensitive information are ethical and in line with SOC compliance standards.

No, SOC compliance is not a legal requirement. SOC audits, however, are considered industry standards that credible service providers should achieve. Furthermore, SOC certification can go a long way in persuading customers to entrust their sensitive data to your firm.

Benefits of SOC compliance include:

  • Greater trust and loyalty from clients
  • The assurance that your information systems and networks are secure
  • An edge over competitors who have ignored their own risk assessment and remediation needs
  • The possibility to get a leg up on additional compliance needs through meeting your SOC attestation requirements

While no legal fines are associated with SOC non-compliance, damages related to a data breach can be in the millions. Furthermore, non-compliance leaves your organization open to potential civil lawsuits from unhappy customers and lost business and reputation.

SOC 2 compliance pricing varies on the size of your business, the complexity of your infrastructure, and the number of trust principles your organization is seeking attestation for. Costs can range from $20,000 to over $80,000 as a starting point.

Yes, SOC compliance automation software like RiskOptics’ ZenGRC can streamline the entire SOC audit and compliance process. This reduces manual effort and ensures continuous compliance monitoring.

SOC 2 is recommended for service organizations that store, process, or transmit sensitive customer data. This includes healthcare, financial services, insurance, retail, and technology.

 Typically, industries conduct SOC assessments annually. However, the period covered by a SOC 2 audit can vary from 6 months up to 15 months, depending on the services provided. Continuous monitoring is recommended between assessments.

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