What is the SOC 2 Compliance?

 

The SOC 2 (System and Organization Controls 2) is a voluntary compliance standard of service organizations, which was created by the American Institute of Certified Public Accountants (AICPA). It defines the manner in which organizations are supposed to handle the customer data according to five Trust Services Criteria, namely, security, availability, processing integrity, confidentiality, and privacy.

 

Unlike other certifications, where there is a strict checklist, SOC 2 is specific to each organization. Every company develops its own controls to adhere to one or a combination of trust principles.

 

What are the 5 Trust Services Criteria?

 

Although Security is the only compulsory category of a SOC 2 audit, the companies have the option to add the others depending on their business model:

 

Security: Coverage of unauthorized access or disclosure.

 

Availability: The systems are to be available and enable their use as promised or agreed.

 

Processing Integrity: Making sure that system processing is full, valid, correct, and authorized.

 

Confidentiality: Secrecy of data that is confidential (e.g., intellectual property).

 

Privacy: The use of personal information under the privacy notice of the organization.

 

SOX 2 Type I and Type II Differences.

 

It is important to know the two types of reports so that you can plan your audit schedule:

 

SOC 2 Type I: In this report, the systems of the company are explained, and whether the controls are established in a manner that is adequate to address the pertinent principles of trust as of a given date. It is essentially a "snapshot."

 

SOC 2 Type II: This report goes further to test the effectiveness of those controls in their operation over a time span (usually 6 to 12 months). This will demonstrate that you are practicing in the area of security rather than a one-time move.

 

Indian Businesses and the Advantages of SOC 2 Compliance.

 

In the case of Indian SaaS and IT companies, SOC 2 Compliance can be a precondition to expanding internationally:

 

Competitive Advantage: With the SOC 2 report, you are distinguished in the market as compared to other competitors who are unable to demonstrate their security posture.

 

Reduced Sales Cycles: SOC 2 will be needed by large enterprise clients in the US and Europe. Its availability eliminates lengthy waiting periods in the process of procurement.

 

Internal Discipline: The process enables you to detect gaps that you were not aware of in security and results in a stronger infrastructure.

 

Risk Mitigation: SOC 2 controls will help you mitigate the risk of data breaches and the disastrous financial/reputational impact of these breaches significantly.

 

Scale globally and build enterprise trust. Get your free SOC 2 readiness assessment and start your compliance journey today.

The 5-Step Road Map to Compliance.

 

The path to SOC 2 compliance typically goes through the following steps:

 

Gap Assessment: Compare your current controls with AICPA standards and identify gaps.

 

Remediation: Author new policies, introduce technical controls (such as disk encryption or logging), and educate workers.

 

The Observation Period: In Type II, you will have to run your controls over a few months in order to collect evidence.

 

The Audit: The evidence is checked by an external CPA (Certified Public Accountant) company, and your team is interviewed.

 

Report Delivery: The final report is issued by the auditor, and you can then circulate it to the clients on a Non-Disclosure Agreement (NDA).

 

Frequently Asked Questions (FAQs)

 

What is the duration of the SOC 2 report?

A SOC 2 report is based on a time frame in the past. To ensure that it remains in compliance, companies typically undergo an audit at least once every 12 months to keep it constantly protected.

Is it possible to substitute SOC 2 with an ISO 27001 certification?

Both are similar in the area of security, but different. The international standard is ISO 27001, but the standard that is desirable in the North American market is SOC 2. A lot of businesses acquire them to reach all corners of the globe.

Is SOC 2 a legal requirement?

No. SOC 2 is not a legal obligation, such as HIPAA or GDPR. It is, however, a de facto requirement when doing business with most big corporations.