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SOC 2 Compliance

SOC 2 is one of the key compliance requirements today. This audit procedure could be highly beneficial to businesses and organizations that work with large volumes of data or sensitive data.
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SOC 2 Compliance Guide

Have you heard of SOC 2? SOC 2 is a set of compliance rules for businesses that store client data in the cloud. It is very commonly used by SaaS companies and SOC 2 SaaS services have their own unique use cases.

Reliable, secure, and dependable are all terms that businesses seek to live up to for their customers. But how can you ensure that the data of your clients is kept safe if your firm or a third party you collaborate with is in charge of managing and keeping it? SOC 2 is a unique type of framework that all technology service or SaaS organizations can use that keep customer data in the cloud and guarantee that organizational controls and policies successfully protect customer and client data.

In this guide, we will thoroughly explore what SOC 2 is, as well as how SOC 2 Compliance works.

The Comprehensive Guide to SOC 2 Compliance

This SOC 2 report breaks down the definition of SOC 2, what a SOC 2 certification is, how to get certified, and everything else business leaders need to know about cloud data regulatory compliance.

What is SOC 2? 

The American Institute of CPAs (AICPA) established SOC 2, a voluntary compliance standard for service organizations that describes how firms should maintain client data. The Trust Services Criteria of security, availability, processing integrity, confidentiality, and privacy are used to create the standard. A SOC 2 report is tailored to each organization's specific needs. Each organization can develop controls that follow one or more trust principles, depending on its own business practices. These internal reports give crucial information about how an organization maintains its data to its regulators, business partners, and suppliers. SOC 2 reports are divided into two categories:

  • Type I involves the organization's systems and if they are designed in accordance with the applicable trust principles.
  • Type II involves the operational efficiency of these systems.

The American Institute of CPAs' Service Organization Control reporting platform includes compliance for SOC 2. Its mission is to keep your clients' information safe and private. As a foundation for data protection, it provides five trust service principles: security, availability, processing integrity, confidentiality, and privacy of client data.

SOC 2 is not a set of controls, tools, or processes that must be followed. Rather, it identifies the criteria that must be met in order to maintain strong information security, enabling each firm to adopt the practices and processes that are most relevant to its goals and operations.

What’s the Difference Between SOC 2 and SOC1?

The AICPA regulates both SOC1 and SOC 2, which are two separate compliance standards with different aims. SOC 2 is not a step forward from SOC 1.

SOC1 enables a service company to report on internal controls relating to its clients' financial statements. SOC 2 enables a service company to report on internal controls that protect client data in accordance with the Trust Services Criteria.

A SOC1 audit also looks at how consumer data is processed and protected across business and IT systems. A SOC 2 audit, on the other hand, includes all combinations of the five principles. Because of the nature of their operations and legal constraints, some service businesses, for example, deal with security and availability, while others may apply all five criteria. Managers, external auditors, user entities, and CPAs who audit an organization's financial statements should conduct SOC1 audits. SOC 2 audits are intended for the audited organization's leaders, business partners, prospects, compliance supervisors, and external auditors.

What is a SOC 2 Certification?

A CPA is the only person who can execute a SOC 2 audit. At their heart, these audits assess how well a system's service delivery adheres to the SOC 2 trust standards. To achieve SOC compliance, a corporation must first prepare the SOC 2 requirements. Writing security rules and procedures is the first step. Everyone in the firm should adhere to these written documents.

The five core standards of SOC 2 certification include availability, confidentiality, storage integrity, privacy, and security. Let's go over each of those briefly…

Availability

The method, product, or service must be available as long as the user and supplier agree for it to be. Both parties must agree on the necessary degree of service availability, either expressly or implicitly. To fulfill the availability trust principle, a system does not need to be evaluated for efficiency or accessibility, but an auditor must examine the network's dependability and quality, as well as the reaction to security events and site failover while auditing availability.

Confidentiality

If just a few people or organizations have access to information, it must be treated and handled as confidential. Anything the user uploads for the eyes of company personnel alone, including but not limited to business plans, internal pricing lists, intellectual property, and other types of financial information, might be protected under the concept of confidentiality. Data encryption, network firewalls, software firewalls, and access restrictions will all be considered by an auditor.

Storage Integrity

This concept is concerned with delivering the appropriate data at the right time and at the right price, or operating as the platform planned. Complete, licensed, dependable, and fast data processing are all requirements. It's important to note that "storage integrity" does not imply "information integrity." Before it is introduced into the system, information may contain mistakes that the storage entity is not responsible for detecting. To confirm the data's dependability, an auditor must examine data processing management and quality assurance methods.

Privacy

In accordance with the AICPA's generally recognized principles of privacy (GAPP), the principle of privacy applies to the collection, disclosure, disposal, storage, and use of personal information. It covers Personal Identifiable Information (PII), or information that may be used to identify individuals, such as names, addresses, phone numbers, and social security numbers. GAPP also covers other data such as ethnicity, gender, medical characteristics, and religion. Controls in place to prevent the release of PII must be verified by an auditor.

Security

To adhere to the security concept, system resources must be protected from outside access. Attempts at infiltration, device manipulation, unauthorized deletion, data abuse, or inappropriate modification and release must all be appropriately protected by access controls. In addition to administrative controls like background checks and authorizations, an auditor looks at IT security solutions including WAF (web application firewalls), encryption, and intrusion detection.

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How to Get SOC 2 Certified 

The process of getting SOC 2 verified varies depending on the organization. However, in general, one can follow these guidelines step-by-step to get SOC 2 certified:

  1. Determine which of your trust principles will be audited. The security concept is the starting point, but the audit can also incorporate availability, processing integrity, confidentiality, and privacy principles.
  2. Define the controls in your environment that will exemplify the chosen trust principles. You may accomplish this with the support of a third party, such as Accountable HQ, or you can do it internally. You should also have your potential auditor's agreement in principle.
  3. Assess your security procedures and controls against your selected trust principles on your own, or enlist the support of cybersecurity experts to ensure you're ready for a formal audit.
  4. A formal SOC 2 audit by a registered CPA, which might take several weeks, is required. Employee interviews, paperwork, screenshots, logs, additional documentation, and a considerable time commitment can all be part of the process. A third-party partner, such as Accountable HQ, can assist you in managing the process and making it as quick and simple as possible.
  5. Get a SOC 2 attestation report that explains how effectively your security controls met SOC 2's security criteria and trust principles.

Who is SOC 2 For and Who Does It Apply To?

SOC 2 was created with service providers that are keeping client data in the cloud, in mind. As a result, SOC 2 applies to practically any SaaS firm, as well as any organization that stores its customers' data in the cloud. Basically, every technological service provider that manages or maintains consumer data is subject to SOC 2. To preserve the integrity of their data systems and overall security practices, such businesses' third-party vendors and other partners should also be SOC 2 compliant.

Why is SOC 2 Important? 

An organization's compliance with SOC 2 criteria implies that it has a high level of information security. Strict compliance criteria (ascertained through on-site audits) can aid in the responsible handling of sensitive data.

SOC 2 compliance delivers the following benefits:

  • SOC 2 guidelines can help to improve information security processes. The company will be able to better defend itself against cyber-attacks and prevent data breaches.
  • Another advantage is a competitive edge. Customers like to engage with service providers that can demonstrate sound information security policies, especially when it comes to IT and cloud services, therefore SOC 2 is really useful.
  • SOC 2 compliance is becoming a "must-have" for technology organizations and service providers as the cloud  continues to be the preferred location for storing data.

Best Practices for a SOC 2 Audit

SOC 2 compliance is based on security, which is a wide norm that applies to all five trust service requirements. The SOC 2 security principles focus on preventing unwanted access to the organization's assets and data. This principle necessitates the implementation of access restrictions in order to avoid malicious assaults, unlawful data deletion, misuse, unauthorized manipulation, or exposure of firm data. Here's a simple SOC 2 compliance checklist, which includes safety-related controls:

  • Prevent unauthorized personnel from accessing assets by being aware of your access controls, which are the logical and physical constraints on assets.
  • Prepare for change management, which is a way for managing changes to IT systems in a regulated manner, as well as measures for preventing illegal modifications.
  • Plan ahead of time for system operations. Controls that can monitor ongoing activities, detect and rectify any deviations from organizational procedures are used in these operations.
  • Have a procedure in place to notify individuals if a cybersecurity event occurs. Set these alarms to go off only when the cloud's typical trend deviates.
  • Establish a baseline to prevent false-positive warnings. Have a system that continually watches for suspicious activity to establish that baseline.
  • Take a risk-mitigation approach to your audit. Employ processes and actions that enable the organization to recognize risks, respond to them, and minimize them while dealing with any resulting business.
  • Keep in mind that if your company is in the financial or banking area, or if you work in a field where privacy and secrecy are critical, you may need to fulfill more stringent compliance requirements.
  • Concentrate on SOC 2's five fundamental concepts. Customers favor service providers who follow all five SOC 2 standards to the letter. This demonstrates that your firm is serious about information security.

Keep in mind that the SOC 2 standards do not dictate exactly what a company should do as they can be interpreted in a variety of ways. Companies are in charge of selecting and putting in place control mechanisms that address each principle.

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