If you take your cybersecurity seriously, you likely already heard a little about SOC 2 compliance. But what is SOC 2 compliance in the first place? What does SOC 2 stand for? There are a lot of questions surrounding SOC 2 and its functions in your business. We will explore the entirety of SOC compliance and give you the information you need to optimize your cybersecurity and keep up-to-date on the SOC standards.
There is no better place to start than to define the meaning of SOC 2. SOC stands for System and Organization Controls. This is a compliance standard for service organizations put forth by the AICPA (American Institute of Certified Professional accountants) based on the Trust Services Criteria (TSC). The criteria include security, availability, processing integrity, confidentiality, and privacy. There are three types of SOC reports, but SOC 2 is the one to look at when dealing with cybersecurity as it is often referred to by customers when evaluating a company’s overall security.
Now that we have a basic understanding of what a SOC 2 report looks at and who might be interested in the results, we can look at what it might take to prepare for a SOC 2 audit. It is important to note that failing a SOC 2 audit will not shut your business down. It simply means your company is not as secure as you might have thought it was.
The most effective ways to get your business ready include creating up-to-date administrative policies, setting technical security controls, and gathering documentation and evidence for a reputable firm to examine. By updating standard operating procedures in system access, disaster recovery, and security training and roles, an auditor will have less to flag in his report giving your business a better chance of getting certified.
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SOC 2 Vs. ISO 27001
While a SOC 2 compliance certification is helpful in relaying to clients that your organization is secure and safe, it isn’t the only type of certification that can express this to potential customers. The International Organization for Standardization (ISO), in partnership with the International Electrotechnical Commission (IEC), published this standard for information security. When it stands alone, ISO 27001 is a framework for best practices in safeguarding data. Getting certified against ISO 27001 shows customers that your company takes the appropriate steps to secure their data.
It can be confusing when trying to determine who needs SOC 2 compliance and who needs ISO 27001 certification. Which type of certification best suits your business? While it is true that these both deal with similar security controls, the difference arises with the way the controls are practiced. Defining which certification best suits your needs, you must understand the slight differences between each.
ISO 27001 tends to focus on the implementation maintenance of an information security management system (ISMS). Essentially, they inspect the development and use of an overarching security framework that manages the data protection practices put in place by the company itself. Achieving ISO 27001 compliance means you must undergo a risk assessment, identify and implement security controls based on the results of the assessment, then regularly review the controls for effectiveness.
SOC 2 is a bit more fluid in the way a company can go about its certification, but not at the expense of overall security. With the use of the TSCs discussed above, a company can choose to implement as many or as few controls on them as they see fit. Only security controls are required for certification. Do remember, the AICPA SOC 2 is more flexible than the ISO 27001, but not at the expense of general security.
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SOC 2 Type 2
If you’ve decided that the SOC 2 compliance is the right fit for your business, then it will be important to understand the different types of reports that come with it. Understanding the different types of reports will give a little more insight into SOC 2 compliance, meaning things like the SOC 2 controls list, SOC 2 Type 2 cost, and more. It is vital to understand which report your company will benefit from so you don’t waste precious time or money on unnecessary certifications.
Before diving into the other SOC certifications that exist, we need to understand the two “types” of reports. Type 1 reports offer insight into the design of security controls at a single point in time. Type 2 reports look at the operating effectiveness of security controls over a set period of time. While they take longer, they are widely viewed as a more accurate representation of an organization’s security.
SOC 1 certifications deal mostly with internal controls over financial reporting. It caters to organizations that process financial transactions and related data for their clients. They can be important for companies dealing with high volumes of financial transactions, but don’t look any deeper than that. The SOC 1 Type 2 report is the only report that holds any water in the sense of reliability in financial security. SOC 1 certification cost can range between $10K and $20K.
SOC 2 Type 2 reports are viewed as the most important when it comes to credibility in the eyes of your clients. They show a comprehensive report of how well a company commits to protecting customer data over a period of time. SOC 3 compliance is similar to SOC 2 but much less detailed and not as trusted as the SOC 2 certifications. SOC 2 Type 2 cost will usually range from $30K to $60K for the audits alone.