Prepare for SOC 2 Type II

What is a SOC 2 Report?

The Service Organization Control (SOC) 2 is an auditing procedure that tests a service organization’s ability to protect and secure the privacy of its clients.

Many businesses require SOC 2 compliance before employing a third-party service provider. The American Institute of CPAs’ SOC reporting platforms have SOC 2 compliance as a component.

Five trust service criteria are vital in a SOC 2 Report.

• Security: utilizing IT security measures to protect against unauthorized access to personal data
• Availability: ensuring that the software or organization is readily available for operations, monitoring, and maintenance
• Processing Integrity: ensuring that the system in use operates in full function, without error, manipulation or unauthorized use of personal data
• Confidentiality: ensuring clients of the organization’s ability to protect data to the restricted set of persons or organizations involved in the processing 
• Privacy: going hand-in-hand with confidentiality and security, this is the organization’s ability to stop unauthorized access

Differences Between SOC 2 Type I and Type II

SOC 2 Type I

A SOC 2 Type I report refers to a once-off audit of an organization’s security and privacy management systems. This report focuses on the suitability of the security system’s control designs – including logical, technical, and administrative controls.

A SOC 2 Type I report happens at a single point in time, and therefore doesn’t test the effectiveness of the controls over time; that’s what the Type II report is for!

More and more companies require an excellent Type I report, as this ensures that the organization is reliable, trustworthy, and confidential. A company will suffer worse from personal data breaches now than ever before in history.

Increases in cybercrime frequency and skills, as well as in-depth privacy laws popping up all around the world, make it impossible for companies to ‘get away’ with small mistakes. As a big company, it’s perplexing to figure out how to fully secure the systems and client data.

Following SOC 2 guidelines and securing a favorable Type I report helps to create a safe environment between an organization and its clients. But to ensure that this safe environment continually grows and improves, an organization must receive an exceptional SOC 2 Type II report as well.

SOC 2 Type II

This is where the SOC 2 audit gets interesting.

A SOC 2 Type II report is very similar to a Type I report in that it inspects the security system’s control designs.

The difference between Type I and Type II is that the Type II report happens over 3-12 months. As well, the Type II report can test how stable a system’s designs are over some time. A Type II report also reviews the system’s risk management protocols.

When an organization is being audited over time, risks and breaches are bound to arise. No system is 100% perfect, but the auditing process doesn’t require the system to be ‘perfect’. The auditor will inspect how the organization reacted to the problem, the turnaround time for fixing the problem, and the amount of damage that occurred.

SOC 2 Type II Compliance

SOC 2 Type I Compliance

Naturally, the first step to Type II compliance is to secure an adequate Type I report. This is mandatory if an organization wants to receive full Type II compliance.

Define the Reporting Period

A reporting period of under 6 months is impractical for both an organization and the auditors involved. A reporting period of up to 12 months is more reliable and will result in a better report.

Evaluation of Risks

To prepare for a SOC 2 audit, an organization must lay out the revenue that is at risk. Outlining the privacy risks within an organization can be used to make any improvements before entering the SOC 2 auditing process.

Create Administrative Policies, Set Security Controls and Gather Documentation

At this point, an organization may put policies and controls in place that define the roles, responsibilities, and rules of personnel to secure the system.

Once this is done, an organization must compile all the documentation and evidence that the auditor will use during their assessment. 

Find a Reputable Auditing Firm

Make sure to choose an auditing firm that is trustworthy, and follows through on its services. It’s demotivating when an organization has collected its documentation over a few months, only to be rejected because the firm is unreliable.

Final Report

If the auditor is satisfied after the reporting period concludes, the organization will receive its SOC 2 Type II report. This isn’t exactly a certification, in the true sense of the word. Rather, the report will consist of the auditor’s opinion of effective operations in comparison to the description that the management has provided.