What does SOC 2 stand for?

What is SOC 2?

SOC 2 is an AICPA compliance requirement directing how companies store their customer data in the cloud. It’s easy to see why SOC 2 has become a common compliance talking point these days, with the proliferation of eCommerce, software-as-a-service (SaaS) business models and outsourced services where cloud security and data storage are necessities.

While it’s a common standard, achieving full compliance is easier said than done. Simply googling “what is a SOC 2 compliance strategy” won’t be enough to do the job right.

To help us navigate, let’s review the fundamental SOC 2 requirements and how to prepare for an audit.

What Is SOC 2?

SOC 2 stands for Service Organization Control 2, a set of information security standards related to five elements known as trust service criteria (TSC). These include:

  • Security
  • Availability
  • Processing integrity
  • Privacy
  • Confidentiality

Achieving SOC 2 compliance means a company has the necessary oversight to monitor system activity, control for these variables, and prevent unauthorized access to systems or data. Typically, SOC 2 compliance is a must for third-party providers who store client information in the cloud, as well as tech companies, healthcare organizations and online retailers.

What is SOC 2 Compliance?

What is SOC 2 Compliance?

A unique aspect of SOC 2 reports is that they’re individually-tailored to each company (compared with, say, a PCI DSS audit report, which features more rigid reporting criteria). SOC 2 audits may look different for each company, depending on the services, third-party providers, and technologies used.

Typically, auditors will perform evaluations of select TSCs as needed to determine how successfully the company can manage these internal controls. The AICPA recommends that companies perform these audits every 6-12 months to stay on top of emerging compliance issues.

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What is a SOC 2 Report?

It’s only natural for companies unfamiliar with compliance to ask, “what is a SOC 2 report”? There are actually two types of SOC reports that businesses will need to become familiar with:

  • The type 1 report details a vendor’s systems and whether those systems are capable of meeting required trust principles for certification;
  • The type 2 report offers more granular detail into the efficacy of these systems

During an audit, the representative may choose one (or several) TSCs to review as part of the certification process. The TSCs reviewed will depend on the company in question and its security control needs.

For example, healthcare organizations may get audited more frequently on privacy/confidentiality access controls, as those are foundational to patient safety and HIPAA governance. Conversely, cloud vendor service organizations may be subject to more scrutiny on the security and availability criteria – two essential elements to mitigate a cloud-based security incident.

The auditor will perform these assessments and make determinations about the company’s ability to address the chosen criteria.

What is a SOC 2 Report?

Preparing for a SOC 2 Audit

What is a SOC 2 certification if not the best way to prove that a company has the processes, parts, and trained people to achieve full data security? Auditing is part of the certification process, so companies seeking this credential need to approach their audit with a plan:

  • Choose a reporting period that makes sense for your organization, ideally at regular intervals of 6-12 months
  • Consider which of the five SOC 2 TSCs are most applicable to your organization and which obligations you have from a legal and regulatory perspective.
  • Collect all relevant documentation for the audit, including inventories, change management processes, organizational charts, and other files that may be needed
  • Perform a gap analysis on your existing system to get ahead of any easily-identified issues before the audit occurs.

These are the essential steps to preparing for a SOC 2 audit, but there’s much more that goes into the compliance process than we can fit into this brief discussion. To truly prepare your organization for an audit, Power Consulting offers compliance testing services to keep things as simple as possible.

No matter your industry, we’ll work with you to understand your compliance needs and the best way to move your organization forward. Visit our site or contact us here to learn more!