It only specifies the general criteria that companies can leverage to maintain robust information security. Each organization can then adopt what it considers to be the best practices and processes based on its own objectives and operations. <\/p>\n\n\n\n\n
![\"JumpCloud\"](\"https:\/\/jumpcloud.com\/wp-content\/uploads\/2023\/02\/image-1-1-aspect-ratio-160-110-1.png\")
\n <\/div>\n \n The IT Manager\u2019s Guide to Data Compliance Hygiene <\/p>\n
\n How to ace your audit <\/p>\n <\/div>\n
Who Needs a SOC 2 Report?<\/h2>\n\n\n\n
Companies that need SOC 2 reports include CSPs, SaaS providers, and any organization that stores its customer data in the cloud. The report proves that customers\u2019 data is kept private and protected from unauthorized entities. There is no particular sector that requires these reports. <\/p>\n\n\n\n
However, businesses operating in financial services such as banking, insurance, and investment usually find SOC 2 compliance a valuable undertaking. This is because it helps to establish trust with stakeholders and customers. For example, at any given time, the customer (client company) may ask the service organization to provide a SOC 2 audit report, particularly if private or confidential information is entrusted to the organization. <\/p>\n\n\n\n
When Should You Get a SOC 2 Report?<\/h2>\n\n\n\n
There is no hard and fast rule regarding the time frame that companies should get a SOC 2 report. However, there is consensus that any SOC 2 audit report older than one year is considered \u201cstale.\u201d This means that if you conducted your initial SOC audit in year one, you should undertake another after approximately 12 months to demonstrate the effectiveness of the organization\u2019s security controls. <\/p>\n\n\n\n
The assumption here is that the intended users of the SOC 2 report, such as prospects and clients, would want to continually gain assurances that the company is still adhering to the best security practices and controls. As such, the assessment of an organization\u2019s internal controls should always be dated to ensure that the report has a limited value of one year. <\/p>\n\n\n\n
What Does a SOC 2 Report Cover?<\/h2>\n\n\n\n
A SOC 2 report structure has five essential components:<\/p>\n\n\n\n
- \n
- An opinion letter from the auditor<\/li>\n\n\n\n
- The description of the system under review<\/li>\n\n\n\n
- The management\u2019s assertion of compliance<\/li>\n\n\n\n
- The description of the tests of controls<\/li>\n\n\n\n
- The results of the audit process.<\/li>\n<\/ul>\n\n\n\n
Each report will be unique to the company and will vary depending on the five Trust Services Principles described in the following sections.<\/p>\n\n\n\n
SOC 2 Trust Services Criteria<\/h3>\n\n\n\n
The Trust Services Criteria (TSC)<\/a> consists of five trust services categories: <\/p>\n\n\n\n
Security<\/h4>\n\n\n\n
The security controls category defines measures that protect the system against unauthorized access, disclosure, or damage to systems that can potentially affect other criteria beyond the security category. Some security controls you can leverage include firewalls, multi-factor authentication (MFA), and intrusion detection. <\/p>\n\n\n\n
Availability <\/strong><\/h4>\n\n\n\n
The availability controls category ensures that the systems are always available for operation and use to meet the organization\u2019s objectives and service level agreements (SLAs). While these controls don\u2019t set the minimum acceptable performance standards, they usually address whether systems should support and maintain system operations such as sufficient backup and disaster recovery measures. <\/p>\n\n\n\n
Processing Integrity<\/strong><\/h4>\n\n\n\n
Processing integrity controls ensure that data is processed correctly, free from unexplained or accidental errors. In other words, the processed data should always be accurate and reliable. <\/p>\n\n\n\n
Confidentiality<\/strong><\/h4>\n\n\n\n
The confidentiality category requires organizations to demonstrate that they protect confidential information throughout its lifecycle, including data collection, processing, and dissemination. In this regard, confidential information includes the organization\u2019s trade secrets and intellectual property (IP). Such data can be protected through encryption and identity and access management (IAM) controls. <\/p>\n\n\n\n
Privacy<\/strong><\/h4>\n\n\n\n
The privacy controls are similar to those of confidentiality. However, they specifically refer to personally identifiable information (PII) that the organization captures from its customers. It specifies the communication, consent, and collection and processing of PII. <\/p>\n\n\n\n
What Is SOC 2 Type 1 Compliance?<\/h2>\n\n\n\n
A SOC 2 Type 1 is an audit report on the service organization\u2019s system and its suitability in terms of the design of the controls. The report specifies the current system and attests to the controls that have been put in place at a specific point in time. <\/p>\n\n\n\n
What Is SOC 2 Type 2 Compliance?<\/h2>\n\n\n\n
A SOC 2 Type 2 report proves the accuracy of controls the service organization has put in place over a more extended period (usually more than six months). The report describes the organizational controls and attests to them depending on their operational effectiveness. <\/p>\n\n\n\n
Benefits of SOC 2 Compliance<\/h2>\n\n\n\n
Organizations that handle customer data can derive numerous benefits from complying with SOC 2 standards. Some of these benefits include: <\/p>\n\n\n\n
Improved Security Posture<\/h3>\n\n\n\n
A robust cybersecurity architecture relies on high standards. SOC 2 compliance can help organizations enforce the protection of their systems and data against unauthorized access through measures such as firewalls and IAM controls. <\/p>\n\n\n\n
Efficient Processes and Thorough Documentation<\/h3>\n\n\n\n
By adhering to SOC 2 standards, organizations can demonstrate that their processes are transparent and efficient. It allows the organization to ensure that the business runs continuously and the processes are correct to achieve key goals. <\/p>\n\n\n\n
Brand Positioning<\/h3>\n\n\n\n
Complying with SOC 2 standards can help an organization promote its brand reputation by minimizing data breaches. In addition, customers concerned with security are likely to be attracted to SOC 2-compliant companies. <\/p>\n\n\n\n
Cost Reduction<\/h3>\n\n\n\n
Organizations that don\u2019t comply with SOC 2 standards can be forced to pay numerous costs, including fines and settlements, business disruption, productivity costs, and revenue loss. In addition to these costs, such organizations end up damaging their brand reputation. <\/p>\n\n\n\n
Other Compliance Initiatives<\/h3>\n\n\n\n
SOC 2 compliance requirements often dovetail with other frameworks, including the International Organization for Standardization (ISO)\/ International Electrotechnical Commission (IEC) 27001<\/a> and HIPAA. Therefore, complying with SOC 2 allows the company to speed up its overall regulatory and other compliance efforts. <\/p>\n\n\n\n
SOC 2 Compliance Challenges<\/h2>\n\n\n\n
While essential, SOC 2 compliance isn\u2019t straightforward to pursue because of various challenges. Let\u2019s explore some challenges an organization can encounter while complying with SOC 2 standards. <\/p>\n\n\n\n
Underestimating the Scope<\/h3>\n\n\n\n
SOC 2 compliance usually involves accounting, human resources (HR), and many other departments other than IT. To comply with SOC 2 standards, organizations will require coordinated efforts across multiple departments. This is a significant challenge, particularly for companies that lack experienced IT teams. <\/p>\n\n\n\n
Undefined Responsibilities<\/h3>\n\n\n\n
Organizations that operate under tight budgets are usually forced to use limited staff. In addition to the limited staff, some companies may struggle further if they don\u2019t assign clear control owners and responsibilities<\/a>. Undefined roles and responsibilities can result in possible SOC 2 compliance implementation gaps. <\/p>\n\n\n\n
Manual Management and Documentation<\/h3>\n\n\n\n
With ever-changing regulations and rules, managing all controls and documentation can become disorganized and lead to errors, especially for organizations that use manual methods. Complying with SOC can be costly, time-consuming, and resource-intensive without an effective automated management system. <\/p>\n\n\n\n
Lack of Buy-In<\/h3>\n\n\n\n
Like any other business initiative, strategic buy-in is essential to successfully implementing SOC 2 compliance. Without the buy-in, some stakeholders in the SOC 2 compliance process won\u2019t be motivated to implement the strategy, while others may not follow it. Everyone from the top down should be bought in and clear about how they contribute to the initiative.<\/p>\n\n\n\n
Skipping a Readiness Assessment<\/h3>\n\n\n\n