SOC 2: The complete guide to compliance

What is SOC 2?

Definition and Context

Not to be confused with a Security Operations Center, SOC 2 is an audit framework developed by the AICPA (American Institute of Certified Public Accountants) to assess internal controls related to security, availability, processing integrity, confidentiality, and privacy. Its purpose is to verify that service providers manage their clients’ data securely. Rather than a checklist, SOC 2 uses the Trust Services Criteria (TSC) as the basis for the audit. The SOC 2 audit evaluates the design and effectiveness of the controls implemented by an organization to meet these criteria.

Who is concerned by SOC 2?

SOC 2 compliance mainly concerns technology companies and cloud-based service providers that store or process customer data. This typically includes:

• IT service providers
• Software as a Service (SaaS) providers, Platform as a Service (PaaS) and Infrastructure as a Service (SaaS) providers
• Data centers and colocation services
• Managed Service Providers (MSPs)
• Any organization whose services involve managing, processing, or storing sensitive customer data.

More and more clients, especially large enterprises, require a SOC 2 report from their providers to ensure the security of their own information.

Why is SOC 2 compliance important?

Obtaining a valid SOC 2 report offers multiple benefits for a service organization:

1. Customer trust: It is tangible proof that the organization takes security and data protection seriously.
2. Contractual requirements: Many B2B contracts now require it.
3. Competitive advantage: Differentiate from competitors who are not SOC 2 compliant.
4. Internal security improvement: The audit process forces the organization to review and strengthen its own security policies and controls.
5. Risk management: Helps identify and mitigate risks related to security, availability, processing integrity, confidentiality, and data privacy.
6. Access to new markets: Opens doors to larger clients or those operating in regulated sectors.

SOC 2 compliance is therefore not just about meeting standards but a real strategic lever for the business.

The 5 Trust Services Criteria (TSC)

Le cadre SOC 2 évalue les contrôles d'une organisation selon un ou plusieurs de ces critères définis par l'AICPA :

• Security (Mandatory): Ensure protection of systems and data against unauthorized access and threats to availability, integrity, confidentiality, and privacy.•
• Availability: Ensure systems and services are operational and accessible as agreed for clients.
• Processing Integrity: Ensure data processing by systems is complete, valid, accurate, timely, and authorized.
• Confidentiality: Protect information designated as confidential against unauthorized disclosure via access and protection controls.
• Privacy: Manage personal information (collection, use, retention, disclosure, disposal) in accordance with privacy policies and applicable standards.

Types of SOC 2 Reports

There are two types of SOC 2 reports, offering different levels of assurance. The choice between a SOC 2 Type I and Type II report depends on the organization’s needs and its clients’ requirements.

Type I: A snapshot at a point in time

A SOC 2 Type I report describes a service organization’s systems and evaluates the suitability of the design of controls to meet the selected trust services criteria at a specific date (“point in time”). This report attests that controls are properly designed but does not verify their operational effectiveness over time. It is often a first step toward SOC 2 compliance.

Type II: An evaluation over a period

A SOC 2 Type II report goes further. In addition to assessing control design (like Type I), it tests their operational effectiveness over a defined period (typically 6 to 12 months). This type of report provides much higher assurance to clients and partners, as it demonstrates that security and other controls function consistently. Producing this report requires a more in-depth audit. A SOC 2 Type II is often preferred by clients.

Comparison Type I vs Type II: Which to choose?

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The choice depends on the organization’s maturity, client requirements, and available resources. A Type II report is generally the ultimate target to demonstrate robust SOC 2 compliance and gain lasting client trust.

SOC 1 vs SOC 2 vs SOC 3: What are the differences?

The AICPA offers several types of SOC (System and Organization Controls) reports. It is essential to understand their distinctions to choose the right report:

In summary, if your service impacts your clients’ financial information, a SOC 1 report is appropriate. If you manage or host client data and must prove security, availability, etc., the SOC 2 report is the standard. The SOC 3 report is a lightweight version of SOC 2 for public communication.

SOC 2 Audit Process

Obtaining a SOC 2 report is a significant project requiring careful preparation. The SOC 2 audit itself is conducted by an independent CPA firm.

Key preparation steps

1. Define the scope: Which systems, services, and trust services criteria (TSC) will be included in the audit?
2. Perform a gap analysis: Identify differences between current controls and SOC 2 requirements.
3. Remediation: Implement missing controls or strengthen insufficient ones. This may include technical adjustments (architecture, encryption, telecommunications) or procedural (internal governance, incident response).
4. Documentation: Create or update policies, procedures, and system descriptions. Gather evidence of controls’ operation. Implementation must be documented.
5. Readiness assessment: Often done with consultants or the auditor’s help (through advisory services separate from the audit to ensure independence), this step simulates the audit to identify final adjustments.

Choosing the auditor

It is crucial to choose a reputable CPA firm experienced in SOC 2 audits for your industry. The auditor must be a member of the American Institute of Certified Public Accountants (AICPA) and independent from the audited organization. Ask for references and compare approaches and options.

Audit duration and cost

The duration and cost of a SOC 2 audit vary significantly depending on:

• The size and complexity of the organization.
• The type of report (Type I or Type II).
• The number of trust services criteria included.
• The organization’s level of preparation.
• The chosen audit firm.

A SOC 2 Type I audit can take a few weeks to several months (including preparation).

A SOC 2 Type II audit requires an observation period of 6 to 12 months plus preparation and report writing time. Costs can range from tens to several hundred thousand euros. A successful SOC audit requires significant investment.

Exigences de conformité SOC 2

SOC 2 compliance relies on implementing and maintaining appropriate controls aligned with the chosen TSC.

Implementing controls

The organization must design, implement, and operate controls covering various areas, including:

• Control environment: Corporate culture, internal governance, organizational structure.
• Communications: How data and policies are communicated internally and externally.
• Risk management: Identification, analysis, and mitigation of risks related to security objectives. Includes phishing prevention.
• Access controls: Logical and physical, identity and access management.
• Operations: System monitoring, incident response, change management, backups.
• Security: Technical security controls (firewalls, IDS, SOAR), vulnerability testing.

Implementing these controls is fundamental to passing the SOC audit.

Required documentation

Complete documentation is essential for the SOC 2 audit. It must include:

• Information security policies.
• Standard operating procedures (SOPs).
• Detailed descriptions of audited systems and services.
• Organizational charts.
• Control matrices.
• Evidence of control execution (logs, screenshots, reports, etc.).
• Risk management and incident response plans.

This documentation proves to the auditor that controls exist and are followed.

Benefits of SOC 2 Compliance

Obtaining and maintaining SOC 2 compliance brings significant benefits to a company, beyond simple audit validation:

• Increased trust from clients and partners: A SOC 2 report proves the organization’s commitment to data security and service reliability, strengthening business relationships.
• Access to new markets: SOC 2 compliance is often a requirement to contract with large companies or operate in certain sectors, opening new business opportunities.
• Improved internal security: The SOC 2 process encourages continuous review and strengthening of controls, security policies, and data protection, reducing risks and vulnerabilities.
• Competitive advantage: Complying with SOC 2 differentiates the company from competitors, signaling operational maturity and commitment to security best practices, which can be a decisive factor for clients.

Useful resources

Links to official documents

• AICPA - System and Organization Controls (SOC): https://www.aicpa.org/soc (General link to AICPA SOC resources)
• AICPA - Trust Services Criteria: Search for TSC documents on the AICPA website for detailed criteria.

Frequently Asked Questions (FAQ)

What exactly is SOC 2?
SOC 2 is an AICPA audit framework for service organizations, assessing their controls related to security, availability, processing integrity, confidentiality, and/or privacy of data managed for their clients. It results in a SOC 2 report (Type I or Type II).

Is SOC 2 compliance mandatory?
No, SOC 2 is not a law. However, it is often contractually required by clients, especially large enterprises, making it almost mandatory for many technology service providers. It is a market-driven standard to establish trust.Q3: How long is a SOC 2 report valid?

How long is a SOC 2 report valid?
A SOC 2 report has no official expiration date but is generally considered valid for 12 months. Clients expect service organizations to renew their SOC 2 audit annually to ensure controls remain effective.

What is the main difference between SOC 2 and ISO 27001?
Both concern information security. ISO 27001 is an international standard certifying an organization’s information security management system (ISMS). SOC 2 is an audit report (not a certification) based on the AICPA TSC criteria, more focused on specific controls implemented by U.S.-based service providers (though recognized globally). An organization can have both. The goal is to certify security.

What are the challenges of SOC 2 compliance?
Major challenges include audit and remediation costs, internal time and resource demands (especially for a Type II report), complexity of control implementation and documentation, and ongoing compliance maintenance post-audit. Automation can help address some of these challenges. Successfully passing a SOC audit requires strong commitment.