Demonstrating Information Security commitments is valuable for many reasons – showing potential clients that you are following best practices, winning government tenders, or just feeling confident that you are on the right track to securing your organization. Following these best practices provides a sense of security and reassurance that you are doing everything in your power to protect your organization. The need for standardized compliance standards has increased due to these requirements, and SOC 2 is one of the many frameworks out there, joined by others such as ISO 27001, NIST CSF, and CyberSecure Canada.

The American Institute of Certified Public Accountants (AICPA) developed SOC 2 around five Trust Services Criteria: security, availability, processing integrity, confidentiality, and privacy. These criteria are not just guidelines but the backbone of SOC 2 compliance, underscoring the gravity and significance of this standard in information security.

Importance of SOC 2

While not a silver bullet that guarantees your organization will never experience a cyber attack again, SOC 2 is significant to the businesses that adopt it and brings with it several benefits; the following is a non-exhaustive list of benefits SOC 2 can bring:

1. Increases Customer Trust: According to a consumer survey by PingIdentity, 81% of people stop engaging with a brand online following a data breach. Customer trust is paramount, and having a SOC 2 certification can help your organization avert breaches and win customer trust.

2. Stand Out from Competitors: Security is a marketing proposition, and businesses need to change the way they see it. When you have security-conscious customers, they are not just evaluating a product category for the best features, but also who has the best security. Leveraging your SOC 2 can give you a competitive edge and help you stand out from similar competitors.

3. Increase investor confidence: With the average cost of a data breach exceeding 4.88 million (Cost of a Data Breach Report 2024), investors have never been more skeptical when investing in businesses. After all – why cut a check for a business that will get hacked and lose trust and customers? SOC 2 compliance can increase investor confidence by letting them know you’re on the right track with your information security program.

4. Improved operational efficiency: Achieving and implementing SOC 2 streamlines security and operational procedures, making it easier to build upon them to implement further security strategies. Having the processes in place to continuously evaluate needs, SOC 2 makes your operations more efficient and productive.

Five Trust Service Principles

AIPCA defines five Trust Service Criteria (TSC) against which your organization can opt to be audited. These choices are largely dependent on your specific needs and industry requirements. For instance, a company in financial services might prioritize processing integrity, while a healthcare provider might focus on confidentiality and privacy. However, it’s important to note that the Security principle is mandatory for all SOC 2 audits, providing a security baseline. The following graphic illustrates the TSC principles and their coverage.

SOC 2 Types and Reports

Understanding the difference between SOC 2 Type 1 and Type 2 reports is crucial, as they determine the auditor’s effort when assessing your environment.

SOC 2 Type 1: This report evaluates a company’s controls at a single point in time. It ensures the security controls are properly designed and serve as a solid foundation for the subsequent steps. Receiving this report is a significant milestone, demonstrating to potential clients and other interested parties that you are on the path to obtaining a Type 2.

SOC 2 Type 2: A company and its auditor will determine a monitoring period (traditionally 3 – 12 months) to ensure the controls are adequate over time and are being followed, granting a SOC 2 Type 2 certification.

While it’s possible for companies to bypass Type 1 and aim directly for Type 2, this approach can be more demanding. Without the preliminary assessment provided by a Type 1 report, it may be challenging for businesses to identify and address potential issues early in the process.

The SOC 2 Audit Process

Preparation for a SOC 2 Audit

Preparing for a SOC 2 audit is no easy task; thankfully, several compliance platforms can make the job easier. If you prefer a manual approach without relying on external platforms, the following high-level steps are how to approach preparation. Before undertaking SOC 2, understand which Trust Service Crtiera your business needs. Perform a Readiness Assessment to identify gaps in your current controls. Based on the readiness assessment results, develop approximate policies and procedures and implement the required controls (e.g. training). Finally, gather the documentation required for the evidence and ensure it’s documented. While there are platforms to manage compliance, WatchDog Security is the only platform needed to supplement any existing platform or your manual SOC 2 organization. We provide all the technological and security controls required to meet the requirements of SOC 2. We maintain a comprehensive list of SOC 2 requirements and what’s required to meet them, you can view them here.

During The Audit

When engaging with an auditor, you can expect a reasonably standardized and fairprocess that nearly all companies that achieved SOC 2 have been subject to. It will start with an initial meeting where the auditor will outline the audit process, scope, and timeline, followed by interviews and observations of processes based on the evidence submitted. They may request additional evidence if the documents don’t suffice. They may require walk-throughs of your processes, sampling of records or other procedures.

Post-Audit Actions

Finally, once the audit is completed, it’s essential to review the report to understand the findings and recommendations and create a remediation plan to fix any identified deficiencies or weaknesses in your controls. Ensure that these remediation steps are executed and any relevant tasks (such as updating policies or improving control are done) and communicate the findings and remediation plan to users internally. Once done, feel free to share the SOC 2 Type 2 report when customers request it. We recommend only publicizing your report with safeguards (e.g. asking for email or some consent) to safeguard your company’s information.

SOC 2 Timeline