As business processes evolve to be almost exclusively digital, businesses’ data security has come under scrutiny. You may have noticed prospective customers and vendors have begun to ask about your cybersecurity controls. Some may have requested an independent third-party attestation report. If you wait for that question to seek verification, it’s already too late—you risk losing business and their confidence. 

Achieving SOC 2 compliance prepares you to satisfy the standards of your clients and vendors. But navigating the auditing process takes preparation and forethought.

Charles IT’s expert and Director of Finance and Operations, Sal Marino, thinks businesses should regard SOC 2 certification as a business enabler, welcoming the effort it takes to comply. Here, he explains the importance of the standards and nuances of SOC 2 certification.  

What Is SOC 2 Compliance?

SOC stands for System and Organization Controls. It’s an auditing procedure established by the American Institute of Certified Public Accountants (AICPA) to ensure that service providers securely manage client data.

SOC was first created to certify that a company’s operational and financial internal controls can properly handle client financial data and information. As the audit’s scope expanded, AICPA broke it down into three different reports: SOC 1, SOC 2, and SOC 3.

While SOC 1 focuses on the original intent of validating internal controls for financial statements, SOC 2 has evolved to cover more ground and become the most common SOC certification.

A SOC 2 audit evaluates processes, such as IT, HR, etc., based on five Trust Service Criteria (TSC) — security, availability, processing integrity, confidentiality, and privacy. A SOC 2 Type 1 report verifies that controls are compliant at a specific point in time, while a Type 2 report certifies compliance over a period (e.g., 12 months.) 

Why Is SOC 2 Important?

A clean SOC 2 report signals to customers that your company’s procedures meet a high standard to protect the interests of their organizations and customers. The controls give you a solid foundation to prevent cyberattacks and safeguard customer data while streamlining compliance with other privacy laws.

So besides establishing trust and staying best in class — which can help you win and retain more customers, SOC 2 also helps support compliance with increasingly stringent privacy laws, avoid hefty penalties, and protect your reputation. 

Facilitate Growth with SOC 2 Certification

There’s a growing need to meet various compliance requirements in every industry and across different platforms. But instead of being reactive, companies should take a proactive stance to ensure data security — which requires a mindset shift. Marino believes businesses that view SOC 2 Type 2 report as a business enabler — instead of just a checkbox item — will have a distinct advantage. “It helps you increase your cybersecurity maturity level to build trust and confidence with partners and customers,” he says.

In fact, many organizations refuse to work with vendors that haven’t implemented a cybersecurity framework — not only in IT but also across other business practices. The certification speaks for itself, helping you shorten the sales cycle and lower the cost of new client acquisition. Instead of filling out endless questionnaires about your security protocols, you can just present your SOC 2 report to pass the vetting process.

Additionally, a SOC 2 report can make getting cyber insurance much easier and less costly. Many companies are denied coverage outright because they haven’t implemented the proper security protocols.

Which SOC 2 Report Do You Need and How to Get Started? 

A SOC 2 Type 1 report demonstrates compliance at a given point in time, while a Type 2 report shows that your policies and procedures are compliant over a specific period (e.g., 6 or 12 months.)

In general, companies should aim to achieve SOC 2 Type 2 compliance to demonstrate their ongoing commitment to adhering to the highest security standards and protecting their clients’ information.

Obtaining a SOC 2 report is a long journey with many moving parts — the five TSC covers 64 requirements with approximately 300 points of focus. Most companies can benefit from partnering with an experienced managed services provider (MSP) to guide them through the complexities of the SOC 2 auditing process. “We typically start with a gap analysis to assess and document your current controls, environment, and infrastructure. Then, we help you design and implement a remediation plan,” Marino says. It’s wise to shore up any deficits before paying for an external auditor to come in only to put a long list of deficiencies and recommendations in your report.

How Often Do You Need a SOC 2 Audit?

A clean SOC 2 report demonstrates compliance over a specific period — you can decide on a “sample size” and then have everything audited within that timeframe. “The frequency you set doesn’t matter — it could be one month or three years. But we recommend at least an annual audit. A clean and current SOC 2 report builds trust by showing your prospects and customers that you can keep their data safe,” Marino says. 

Overcoming SOC 2 Challenges and Misconceptions

Time and resources are the two biggest obstacles for small and mid-sized businesses because they don’t have dedicated personnel to maintain their processes to ensure ongoing compliance. “Trying to take on your first SOC 2 audit internally can be very daunting. Most businesses can benefit from working with a partner who can help with data collection, segmentation, and aggregation,” Marino says. He explains that an MSP can also compile your audit log and act as a liaison between you and the auditor. 

Additionally, be aware of these common misconceptions that could derail your efforts:

• You don’t “pass or fail” SOC 2. After the audit, you get a report with recommendations to address your deficiencies. But if you present one with a long list of findings to a client or prospect, it doesn’t instill confidence.
• Some organizations think they don’t need SOC 2 if they comply with other cybersecurity standards, such as CMMC and DFARS. But SOC 2 covers internal controls of your overall business operations, not just IT and data security. 
  

Get Support with SOC 2 Compliance

You don’t have to go it alone. Work with a SOC 2 Type 2 compliant MSP, so you can be sure that it practices what it preaches and has the experience to guide you through the process.  

Getting expert assistance to navigate the complexity of a SOC 2 audit can help ensure that you get a clean report to leverage SOC 2 compliance as a competitive advantage. For example, at Charles IT, we work with our clients to review all the key points, collect audit evidence, and maintain a repository to expedite the audit. 

Marino sums it up this way: “If you treat SOC 2 compliance as a business enabler instead of a checkbox item, the investment will pay dividends by helping you attract and retain more high-value customers.”  

Learn more about how we can set your business on the fast track to SOC 2 certification.