SOC 2 Compliance Checklist

SOC 2 compliance includes a set of principles, known as the Trust Services Principles (TSPs), to perform an information security audit. The process includes evaluating controls related to the security and integrity of the information shared or processed in an organization. 

Being compliant with SOC 2 boosts a business's reputation in the market and gives it an edge over its competitors. If you’re new to the SO2 compliance process, you probably have many questions about the steps involved in becoming compliant. 

Businesses have to improve their policies and operations to a high standard to pass the SOC 2 compliant audit. Here is an easy step-by-step guide with SOC 2 compliance checklist to help you become compliant without much trouble.

What is SOC 2?  

Understanding the basics of SOC 2 is important for all beginners. A business can comply with SOC 2 only if it knows what these principles include and exclude. 

SOC 2, also known as System and Organizational Control, is an auditing criterion for service-providing companies. It requires the service providers to comply with a strict set of rules when handling sensitive customer data.   

Know that the SOC 2 audit criteria are different from SOC 1. The SOC 2 certification isn’t considered completed even when a business has passed it successfully. 

Instead, the organization has to regularly follow the SOC 2 policies as they deal with customer data daily. So, SOC 2 compliance continues even after the audit is finished.

To get the SOC 2 certification, a business must comply with strict guidelines and trust service specifications. As a service provider, you can choose trust service specifications based on the type of customers you deal with.

How to Become SOC 2 Compliant?

SOC 2 compliance can be quite challenging, especially when running a small business. Unfortunately, you don’t have enough resources to hire an exceptional legal team that guarantees your company’s SOC 2 compliance all the time. 

In fact, many large companies also struggle with ensuring the confidentiality of the customer data being transferred, shared, and disposed of daily. That’s mainly due to the increasing cybersecurity attacks. 

If you’re confused about where to begin with SOC 2 compliance, here is a comprehensive checklist that covers all the essential aspects.

Step 1: Establish a Framework and Define Your Goals 

The first step is to determine the purpose of conducting a SOC 2 compliance audit. For that, you need to define your goals at the beginning of your SOC 2 journey. 

Establish a framework that tells why you’re doing the audit in the first place. For example, is it because your clients are asking for the SOC 2 certification? Or do you want to strengthen your reputation in the market?

Regardless of your reason, it’s important to determine what a SOC 2 certificate will bring to your company. Defining your goals will also help you evaluate the time and resources you may require to execute the audit without compromising your business operations.

With a pre-established framework, you can put all the internal controls in the right place for the success of your SOC 2 audit. Since you’ve already prepared your company for the audit, you’re less likely to get affected by any loopholes in your policies.

Step 2: Choose the Right Type of SOC 2 Report

There are primarily two types of SOC 2 reports:

• SOC 2 Type 1. It looks over the controls used to address the TSPs. The report for this audit assures that a company has designed its controls effectively.
• SOC 2 Type 2. This audit includes all information in Type I and the testing of a service organization’s controls over a specific duration.

You can choose the right type of SOC 2 compliance report by answering the following questions:

1. Will your customers or stakeholders use the report to put their trust in your service organization’s systems?
2.  Do customers need to understand your service organization’s processing and controls details, the tests conducted by the auditor, and their results?

If your answer is “yes” to one or both questions, a SOC type 2 compliance report is suitable for your business.

Step 3: Test for the Right Trusted Service Specifications

The next step is to choose the right trusted service specifications. The American Institute of Certified Public Accountants (AICPA) specifies the below five trusted service specifications: 

Security

It involves protection against unauthorized access through two-factor authentication, strong passwords, firewalls for threat detection, up-to-date security programs, monitoring unauthorized activities, and keeping audit trails.

Confidentiality

It includes preventing the disclosure of unauthorized sensitive information. A services organization must ensure their customers that their data is dealt with by controlled access by authorized parties only. 

Furthermore, the customers must know that their data is fully encrypted with robust firewalls that protect it against intruders. 

Businesses must categorize public and private information separately for more transparency. Again, keeping audit trails also establishes clarity about the data’s confidentiality and regulates unauthorized access.

Processing Integrity

It includes protecting the originality of the data and ensuring it’s not changed from unauthorized sources. The AICPA describes processing integrity as when the system processing is accurate, relevant, complete, timely, and authorized to meet a service organization’s objectives.

Availability

It suggests ensuring the accessibility to systems and data as defined in the service agreement. The performance level of a service provider usually differentiates from the client. However, it must focus on fulfilling customers’ needs. 

So, monitoring the changes in the customers’ needs helps a service organization comply with the SOC 2 checklist and establish positive customer relationships.

Privacy

It involves safeguarding customers’ personal information and its use with their consent. A service provider must ensure a solid level of privacy for their clients, as losing their contact number, financial data, or medical information can cause severe issues.

A Pew Research Center study found that around 93% of adults prioritize controlling their information and choosing who can view it. 

So, focusing on privacy, security, and confidentiality of their customer’s information go hand in hand for service businesses. 

Step 4: Meet Other Essential Compliance Requirements

Besides SOC 2, businesses also have to comply with other requirements, such as PCI DSS and HIPAA. These compliance regulations also focus on ensuring the protection of customer information. 

Fortunately, both HIPAA and PCI DSS requirements are similar to the SOC 2 requirements. Thus, complying with these rules is in the best interest of a services organization.

Step 5: Evaluate Your Preparations

Lastly, you need to evaluate your readiness and see if you have checked all the things according to the standards of the service operator. With this SOC 2 compliance checklist, you can quickly identify your loopholes and develop your control systems to address these problems. 

There is no one correct way of obtaining a SOC 2 certification. In addition, a customer’s needs and demands vary over time. So, a services organization has to take the necessary steps to manage and protect those changing needs.

For an easy and reliable evaluation of your SOC 2 compliance preparations, you can take help from Accountable HQ. Learn more about SOC 2 compliance for services organizations on the American Institute of Certified Public Accountants (AICPA) website.