What is a SOC 2 audit and why is it important for your organisation?

Before diving deeper, let’s look at the basics of a SOC (System and Organization Controls) audit. Let’s also differentiate it from Future Processing’s service – SOC (Security Operations Center) to avoid any misunderstandings.

SOC 2 is a widely recognised certification standard that ensures an organisation meets strict requirements for managing customer data securely. It focuses on five key Trust Service Criteria: security, availability, processing integrity, confidentiality, and privacy.

While Future Processing does not conduct SOC 2 certifications, we help organisations prepare for the process by implementing the required practices, such as robust access controls, monitoring, and incident response procedures. Additionally, we operationalise these practices using tailored tools and workflows to ensure ongoing compliance. We also conduct comprehensive cybersecurity audits.

On the other hand, our SOC (Security Operations Center) service provides proactive threat detection, incident response, and monitoring to protect your organisation against cybersecurity risks, complementing the principles of SOC 2 readiness.

Coming back to SOC 2, the audits are essential for ensuring that an organisation’s operations meet stringent standards for data security, confidentiality, and privacy. They come in three main types:

• SOC 1, which focuses on internal control over financial reporting (ICFR) and is conducted according to ISAE 3402 or SSAE 18 standards.
• SOC 2, which assesses an organisation’s security, availability, processing integrity, confidentiality, and privacy controls against the Trust Services Criteria (TSC) set by the AICPA (American Institute of Certified Public Accountants). It is typically used for existing or prospective clients. In the UK, SOC 2 audits can also be carried out under ISAE 3000.
• SOC 3, which is similar to SOC 2, but provides a concise, general-purpose report suitable for a broader audience.

This guide focuses on SOC 2 audits, one of the most common System and Organization Controls reports, which evaluate an organisation’s controls related to security, availability, processing integrity, confidentiality, and privacy.

These audits are particularly important for businesses that handle and need to protect customer data, as they help demonstrate a commitment to protecting information and ensuring operational resilience. By undergoing SOC 2 auditing, your organisation can build trust with clients, partners, and stakeholders, showing that it adheres to high standards for customer data protection and regulatory compliance.

In recent years, as more companies rely on cloud services and third-party providers for data management, SOC 2 audits have gained even more importance. Not only do these audits help mitigate risks, but they also position your company as a trusted partner in the marketplace. A SOC 2 report provides transparency about your organisation’s internal controls and proves to customers that their data is being handled securely and in compliance with applicable standards.

SOC 2 certification has also become a critical differentiator for companies in today’s competitive market, helping businesses stand out and gain a competitive edge by showcasing their dedication to data security.

What are the differences between SOC 2 Type 1 and Type 2 audits?

When pursuing SOC 2 compliance, your organisation can choose between two types of audits: SOC 2 Type I and SOC 2 Type II.

Both of them are designed to assess your organisation’s adherence to SOC 2’s Trust Services Criteria, but they differ in terms of scope, duration, and what they measure.

SOC 2 Type I

SOC 2 Type I audit evaluates the design and implementation of your organisation’s internal controls at a specific point in time.

It focuses on whether your organisation has implemented the necessary controls to meet the Trust Services Criteria and whether these internal controls are appropriately designed to handle the risks they are intended to mitigate.

SOC 2 Type II

In contrast, SOC 2 Type II assesses the operating effectiveness of those same controls over a defined period, typically six to twelve months.

The Type II audit not only confirms that the controls are in place but also ensures that they have been effectively functioning throughout the review period.

The key difference between the two types of audits is that SOC 2 Type I provides a snapshot of your organisation’s controls at a single moment, while SOC 2 Type II offers a more comprehensive view by measuring the operating effectiveness of those controls over time. This makes Type II audits more thorough and useful for organisations that want to demonstrate ongoing compliance with security practices.

For stakeholders, SOC 2 Type II reports hold more weight because they provide evidence of your organisation’s consistent adherence to security and compliance practices over a longer period.

How can SOC 2 compliance audit benefit my business?

SOC 2 compliance offers numerous benefits for your business that extend beyond just regulatory requirements.

The most immediate benefit is the trust it builds with your clients. By achieving SOC 2 compliance, your organisation demonstrates a commitment to securing and managing sensitive data, which in turn reinforces confidence among existing clients and potential customers.

Let’s look at the main SOC2 compliance audit benefits in more detail:

Building trust

SOC 2 compliance helps establish trust by showing your clients that their data is handled securely and in compliance with industry best practices. This is increasingly important in industries like finance, healthcare, and technology, where customer data security is critical.

Competitive advantage

In a crowded market, SOC 2 certification sets your business apart from competitors. It proves your commitment to maintaining robust security controls, which can be a key differentiator when clients are evaluating service providers.

Access to new markets

Many organisations, especially those in regulated industries or with high-value contracts, require SOC 2 compliance before partnering with third-party vendors. Having a SOC 2 certification can open doors to new business opportunities, especially in industries where data privacy and security are critical.

Risk mitigation

By undergoing a SOC 2 audit, your organisation gains valuable insights into potential risks related to data security, availability, and privacy. The audit process helps identify vulnerabilities, which can then be addressed to strengthen your organisation’s controls and reduce the likelihood of a security breach or compliance failure.

How long does a SOC 2 audit take and who should be involved in the process?

Typically, SOC 2 Type I audits are completed faster since they focus on assessing the design and implementation of controls at a specific point in time. These audits usually take between 4 to 8 weeks.

On the other hand, SOC 2 Type II audits are more time-consuming because they require an evaluation of operating effectiveness over a period of six to twelve months. As a result, SOC 2 Type II audits may take several months to complete, and your organisation should expect to spend more time preparing for and undergoing this type of audit.

Key stakeholders involved in the process include:

• IT and security teams – these teams are responsible for implementing and maintaining the technical controls necessary for compliance. They play a crucial role in the assessment process, providing necessary documentation and ensuring that systems are secure.
• Compliance officers – these individuals ensure that the organisation adheres to all relevant regulations and standards. They oversee the preparation process and ensure that internal controls are properly implemented and documented.
• Executive leadership – senior management needs to be involved in setting policies and ensuring that resources are allocated to meet the necessary requirements. Their commitment to security and compliance is crucial for success.
• External auditors – working with an experienced auditing firm is essential for a successful SOC 2 audit. Auditors will guide your organisation through the process, conduct the assessment, and prepare the final audit report.

How much does a SOC 2 audit cost and what factors influence the price?

The cost of a SOC 2 audit can vary greatly, depending on several factors. Generally, SOC 2 audits range from $20,000 to $100,000 or more.

The price of the audit is influenced by factors such as:

• Scope and complexity – larger organisations with complex systems and multiple business units may face higher costs, as auditors will need to assess more controls and systems.
• Type of audit – SOC 2 Type I audits are typically less expensive than Type II audits, as Type I audits are shorter in duration and require less in-depth analysis.
• Auditor expertise – the choice of auditing firm also plays a significant role in cost. Highly experienced and reputable auditors may charge higher fees, but they bring added value through their expertise and insights.
• Organisation readiness – if your organisation is well-prepared for the audit with well-documented controls, policies, and processes, the cost may be lower. However, if significant remediation is required, the audit may take longer and cost more.

While the cost of a SOC 2 audit may seem significant, the value it provides in terms of building trust, ensuring compliance, and gaining access to new business opportunities often far outweighs the initial investment.

Read more about important factors in your organisation’s cybersecurity posture:

• Cybersecurity best practices and tips for your business
• How to develop a cybersecurity strategy in 6 steps?
• Security architecture 101: understanding the basics

What steps are involved in preparing for a SOC 2 audit?

Preparing for a SOC 2 audit requires a structured approach and careful planning to ensure compliance with Five Trust Services Criteria. Here are the key steps involved:

Conduct a readiness assessment

Evaluate your current controls and identify any gaps in compliance with SOC 2 requirements. This assessment helps you understand the areas that need improvement.

Implement necessary controls

Establish or enhance technical, administrative, and physical controls to ensure compliance with SOC 2 standards.

Document policies and procedures

Ensure that your organisation’s security and operational practices are well-documented, providing clear evidence of your controls’ design and implementation.

Train staff

Educate employees about the SOC 2 requirements, their role in maintaining compliance, and security best practices.

Collaborate with an experienced auditing firm

Engage a trusted auditor to help you navigate the process and ensure that your organisation is well-prepared for the audit

What are common reasons for failing a SOC 2 audit?

Failing a SOC audit is often the result of weaknesses in critical areas that auditors review. Common reasons for failure include:

• Inadequate access control: poor implementation of role-based access or a failure to monitor unauthorised access attempts can create vulnerabilities in your systems.
• Lack of continuous security monitoring: insufficient logging or failure to monitor for security threats in real-time can result in undetected breaches.
• Ineffective incident response plans: without a well-documented and tested incident response plan, organisations may struggle to address security incidents promptly.
• Poorly managed change management: uncontrolled or poorly tracked changes to systems can introduce vulnerabilities or affect system availability.
• Improper data encryption: failing to properly encrypt sensitive data, whether at rest or in transit, can expose organisations to data breaches.
• Unreliable backup and recovery processes: if your backup and disaster recovery processes are not effective or well-documented, your organisation risks significant downtime or data loss.

What is included in a SOC 2 final report?

Every SOC 2 audit finishes with a final report. Such a report provides an in-depth evaluation of an organisation’s controls and practices related to security, availability, processing integrity, confidentiality, and privacy.

It includes:

• Scope of the audit – the systems, controls, and all trust service criteria that were evaluated.
• Testing results – an overview of the auditor’s testing process and the effectiveness of the implemented controls.
• Auditor’s opinion – a professional opinion on whether the organisation meets the required SOC 2 standards, along with any identified exceptions or areas for improvement.

This report is a key document for organisations seeking to demonstrate their commitment to data security, operational excellence, and regulatory compliance. It offers transparency into how an organisation manages risks and protects sensitive data.

Ready to better prepare for a SOC 2 audit, enhance your data security practices, and build stronger relationships with clients and business partners through trusted, verifiable compliance? Get in touch with our team – we’re happy to support you at any stage of the process!