Compliance is not something to take lightly or push to the side, especially in an organization that leans heavily on technology in service of the business. Every day, new software-based companies pop up, and competition can be fierce \u2014 the last thing you want to be known for in this competitive landscape is being non-compliant. <\/p>\n\n\n\n
Failing compliance audits tells current and potential customers that your organization is non-secure and untrustworthy, which can result in a huge loss of public confidence, customer adoption, and overall profitability.<\/p>\n\n\n\n
Familiarity with different compliance standards such as SOC, PCI, GDPR, and HIPAA is important in terms of retaining a positive, trusted brand image, as well as for staying in line with current security and privacy standards and practices. <\/p>\n\n\n\n
This is where understanding and preparing for a System and Organizational Controls (SOC) audit comes in handy. If your service organization is involved in the storage and use of personal information, which these days is just about every organization, then creating a SOC 2 roadmap will be an integral part of your company\u2019s future<\/a>. <\/p>\n\n\n\n Without this roadmap, you\u2019re leaving your company vulnerable to non-compliance with SOC 2, resulting in a less secure system, more openings for data breaches, and a loss of trust in your brand and products. To avoid this, it\u2019s paramount that you recognize what SOC 2 is<\/a> and its importance in relation to the longevity and security of your company.<\/p>\n\n\n\n The main driver of a SOC 2 audit is through customer requests. There may also be a regulator that requests the report, but SOC 2 has picked up a lot of traction in the market and is well-known in the realm of people that are looking to work with organizations that ultimately process confidential data in some way. If your customers haven\u2019t asked for a SOC 2 report yet, they will soon, especially if you\u2019re using technology to deliver your product or service.<\/p>\n\n\n\n There are a few different types of SOC audits \u2014 SOC 1, SOC 2, and SOC 3. <\/p>\n\n\n\n A SOC 2 report is the most detailed report, and it\u2019s used across organizations that use technology to provide their product or service \u2014 it doesn\u2019t have to be relevant to just financial reporting like a SOC 1. <\/p>\n\n\n\n There are two subcategories \u2014 SOC 2 Type I and SOC 2 Type II. A SOC 2 Type I report assesses the design of security processes at a specific point in time, whereas, a SOC 2 Type II assesses the effectiveness of those controls over a period of time.<\/p>\n\n\n\n During a SOC 2 audit, your organization is not assessed against any standards other than the ones that have been laid out by management. There are no external standards that need to be met \u2014 your full focus can remain on your organization\u2019s internal controls and infrastructure. Essentially, you are able to set the standard that your customers need and demand and ensure that you are meeting those standards as audited by a third party.<\/p>\n\n\n\n SOC 2 was developed by the AICPA and is centered around the five Trust Service Categories that are all based on underlying criteria. The relevant criteria to be assessed on will depend on the Trust Service Categories selected by management \/ the organization, and various control owners throughout the organization will have different responsibilities based on the organization\u2019s needs.<\/p>\n\n\n\n The entire scope is defined by management and some key attributes that are included in the scope of a SOC 2 report are infrastructure, software, data, procedures, and people. A SOC 2 report generally covers between six to twelve months and is typically performed annually. <\/p>\n\n\n\n Some companies opt for a SOC 2 Type I audit when it\u2019s their first time, because it focuses on an opinion at a single point in time over the design of controls only, which in turn helps define and improve future controls and processes. Otherwise, it\u2019s very common for organizations to undergo a SOC 2 Type II audit.<\/p>\n\n\n\n There are five Trust Service Categories that can be included in the scope of a SOC 2 audit. The categories are: <\/p>\n\n\n\n Security is a required category, but management can also choose any or none of the other categories to be included in the report. If contracts with customers don\u2019t specify the categories that will be included in a SOC 2 report, then the decision rests solely on management\u2019s shoulders and will be based on the organization\u2019s specific commitments to customers and system requirements.<\/p>\n\n\n\n The five Trust Service Category definitions as developed by the AICPA<\/a> are as follows:<\/p>\n\n\n\n Information and systems are protected against unauthorized access, unauthorized disclosure of information, and damage to systems that could compromise the availability, integrity, confidentiality, and privacy of information or systems and affect your organization\u2019s ability to meet its objectives.<\/p>\n\n\n\n Applicable to most outsourced environments when users of the system require assurance regarding the provider\u2019s security controls for any system.<\/p>\n\n\n\n Information and systems are available for operation and use to meet your organization\u2019s objectives.<\/p>\n\n\n\n Most applicable when there are commitments regarding processes to achieve system availability in SLAs (service-level agreements) as well as disaster recovery.<\/p>\n\n\n\n Information designated as confidential is protected to meet your organization\u2019s objectives.<\/p>\n\n\n\n Most applicable when there are commitments regarding your organization\u2019s practices for protecting sensitive information.<\/p>\n\n\n\n System processing is complete, valid, accurate, timely, and authorized to meet your organization\u2019s objectives.<\/p>\n\n\n\n Most applicable for a variety of nonfinancial and financial scenarios when there are commitments as to the completeness, accuracy, timeliness, and authorization of information and transactions.<\/p>\n\n\n\n Personal information is collected, used, retained, disclosed, and disposed of to meet your organization\u2019s objectives.<\/p>\n\n\n\n Most applicable where the provider interacts directly with end users and gathers personal information. It provides a mechanism for demonstrating the effectiveness of controls for a privacy program.<\/p>\n\n\n\n Attaining a SOC 2 report is one of the most common requirements for any technology-focused company and service organization that stores user data in the cloud. Assuming you\u2019ve determined you need the audit report, here\u2019s how you can plan for a SOC 2 audit:<\/p>\n\n\n\n Before you do anything, it\u2019s important you define the goals of the audit process. The goals you define at this stage will influence the policies, controls, and procedures you need to consider ahead of the SOC 2 audit. You\u2019ll need to determine what to review in terms of your key operations, product offerings, tiers of the product, and more. <\/p>\n\n\n\n You also need to determine whether to go for a SOC Type 1 or SOC Type 2 report. For example, you can start with a SOC Type 1 as you consider obtaining a SOC Type 2 report. Alternatively, you could just go for a Type 1 report. <\/p>\n\n\n\n At this stage, you\u2019ll need to define the organization\u2019s contractual commitments, regulatory requirements, and what Trust Service Categories (TSC) apply to the business. For example, if your customers are located in the European Union (EU), you have to consider the implications of GDPR requirements. Similarly, if you\u2019re operating in the healthcare sector, you have to take into account the impact of HIPAA regulations on the business. <\/p>\n\n\n\n In all these instances, SOC 2 audit can help you prove compliance to prospects or customers who may need to verify your compliance status. You also need to define the optional TSC that the auditor should use in the assessment in addition to the mandatory Security category. For example, you can choose which of the Availability, Confidentiality, Privacy, Processing Integrity, and Privacy categories you would like the business to be audited against.<\/p>\n\n\n\n Every step of the audit process is essential in streamlining and achieving SOC 2 compliance. However, assigning controls is where the entire process of SOC 2 audit preparation can get bumpy and veer off the course. In this regard, you need to ensure that you\u2019ve assigned and clarified the duties and responsibilities of all team members involved in SOC 2 audit preparation<\/a>. <\/p>\n\n\n\n It\u2019s also worth noting that not all controls require the same amount of work. As such, you need to make it clear to everyone involved about the expectations of the SOC 2 audit. If one task is missing or incomplete, the responsibility should fall on the control owner. <\/p>\n\n\n\n Assessing the current processes and controls is a crucial stage in SOC 2 audit preparation as it allows you to probe the auditability of your systems. You can think of this stage as a \u201cpre-test\u201d step that will enable you to see how well your processes and controls adhere to the SOC 2 compliance checklists. It helps you to locate the gaps in the system\u2019s procedures, controls, and documentation before the audit finds them. <\/p>\n\n\n\n Enforcing compliance can help the organization to detect potential cybersecurity breaches, foster trust, and keep operations running safely and efficiently. However, the process can also be costly, plus riddled with a lack of coordination and potential human errors. For many organizations, the answer to this problem lies in implementing a compliance automation solution such as JumpCloud as a way to improve compliance velocity and minimize costs. <\/p>\n\n\n\nWhat is SOC 2?<\/h2>\n\n\n\n
\n
Key Attributes of the SOC 2 Audit<\/h2>\n\n\n\n
Trust Service Categories and Their Applicability<\/h2>\n\n\n\n
\n
Security (Required)<\/h3>\n\n\n\n
Definition<\/h4>\n\n\n\n
Applicability<\/h4>\n\n\n\n
Availability (Optional)<\/h3>\n\n\n\n
Definition<\/h4>\n\n\n\n
Applicability<\/h4>\n\n\n\n
Confidentiality (Optional)<\/h3>\n\n\n\n
Definition<\/h4>\n\n\n\n
Applicability<\/h4>\n\n\n\n
Processing Integrity (Optional \u2013 Uncommon)<\/h3>\n\n\n\n
Definition<\/h4>\n\n\n\n
Applicability<\/h4>\n\n\n\n
Privacy (Optional \u2013 Uncommon)<\/h3>\n\n\n\n
Definition<\/h4>\n\n\n\n
Applicability<\/h4>\n\n\n\n
How To Prepare for a SOC 2 Audit<\/h2>\n\n\n\n
Define the Goals<\/h3>\n\n\n\n
Understand the Audit\u2019s Scope<\/h3>\n\n\n\n
Assign Control Owners<\/h3>\n\n\n\n
Assess Current Processes and Controls<\/h3>\n\n\n\n
Consider Compliance Automation<\/h3>\n\n\n\n