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The SOC 2 Compliance Checklist You Need Before an Audit

SOC 2 Checklist

If you are a service organization and your customers trust you with their data, you may need to pass a SOC 2 audit to sell your products.

Whether your customers demand an audit report from you or industry regulations require one, you may have to provide proof of SOC 2  compliance to demonstrate that the data you’ve been entrusted with is properly secured.

But even if you understand the importance of compliance for your company and have conducted audits before, you may not realize all the ways you can benefit from a SOC 2 audit report. SOC 2 reports can provide a competitive advantage by revealing ways to operate more efficiently and securely, and you can emphasize those strengths when marketing and selling your services.

Review this SOC 2 compliance checklist before your next audit to help protect your customers’ data and your company’s interests.

1. Define your objectives.

SOC 2 compliance can help organizations that handle customer data for other companies strengthen their reputations, financial statements, and stability by documenting, evaluating, and improving their internal controls. One of three types of SOC reports created by the American Institute of Certified Public Accountants (AICPA), a SOC 2 report details the system controls that your company uses to process data and describes the security and privacy of that data.

The AICPA created SOC 2 reports to meet the needs of a range of users who need detailed information and assurance about a service organization’s controls. These users include managers, customers, regulators, business partners, and suppliers. SOC 2 reports can play an important role in:

  • Oversight of the organization
  • Vendor management programs
  • Internal corporate governance and risk management processes
  • Regulatory oversight

Determine what you will test for and why.

2. Choose the appropriate trust service principles to test for.

SOC 2 audits review the controls in place at a service organization relevant to the following five trust service principles, or criteria, as outlined by the AICPA:

  • Security: Information and systems are protected against unauthorized access, unauthorized disclosure of information, and damage that could compromise the availability, integrity, confidentiality, and privacy of that information or those systems.
  • Availability: Information and systems are available for operation and use.
  • Processing integrity: System processing is complete, valid, accurate, timely, and authorized.
  • Confidentiality: Information designated as confidential is protected.
  • Privacy: Personal information is collected, used, retained, disclosed, and disposed of properly.

Security is the only criteria required by the AICPA for SOC 2 audits. The other four are optional, so you can choose which criteria to apply and how when preparing for a SOC 2 audit.

Work with your customers to identify which trust service principles to test for in addition to security. Consider which principles most closely relate to your customers’ concerns and are best for your industry. For example, if you store data but don’t process it for clients, availability may be applicable but processing integrity would not.

However, if you manage transactions for your customers, processing integrity could be important. Similarly, you may want to consider confidentiality or privacy if you manage health information.

3. Combine SOC 2 audits with other compliance initiatives.

SOC 2 controls often overlap with industry-specific requirements, such as HIPAA and HITRUST compliance in the healthcare industry or PCI DSS compliance in the financial services sector. Combining your SOC 2 audit with such initiatives can be cost-efficient and operationally efficient.

4. Pick the right report.

There are two types of SOC 2 reports—SOC 2 Type 1 and SOC 2 Type 2. The type of report you need depends on your specific requirements and objectives.

  • Type 1 is a report on your organization’s description of its system and the suitability of that system’s design. It is a snapshot of your system at a particular point in time. Think of it as a snapshot.
  • Type 2 is also a report on your organization’s description of its system and the suitability of that system’s design, but it also evaluates the operating effectiveness of the system’s controls. And a Type 2 report is more like a movie than a snapshot because it reports on the system over a period of time.

A SOC 2 Type 1 report is a fast, efficient way to ensure that your data is secure and to communicate that to your customers. But a SOC 2 Type 2 report can provide greater assurance by examining your controls more rigorously and for a longer time.

5. Assess your readiness.

Preparing for a SOC 2 audit can be overwhelming, particularly if you are doing it for the first time. You may have many controls to choose from and numerous documentation requirements to satisfy.

Starting with a readiness assessment can increase the effectiveness of your SOC 2 report by helping you find gaps in your organization’s control framework. Determining the policies and procedures that you have in place before you begin the audit will allow you to walk through all controls in advance. Then you can see what needs to be done to pass every test associated with the audit.

Passing a SOC 2 audit should be difficult. But it doesn’t need to be stressful.

Reviewing this SOC 2 compliance checklist before you start will help you prove that your customers’ data is secure so that your company can keep doing what it does best.