The Importance of SOC 2 Compliance Audits in Today’s Digitally Driven Economy
Information technology has created tremendous efficiencies and cost-savings for businesses all throughout the globe, many of which were seemingly not even thought to be possible in the last decade. Organizations everywhere are now even more nimble & proactive in critical decision-making processes than ever before. But with such big rewards also come incredibly large challenges, many relating to the safety and security of highly sensitive client data.
Today’s business platforms rely heavily on cloud-based services and platforms, ranging from the well-known Software as a Service (SaaS) offerings to Platform as a Service (PaaS), Infrastructure as a Service (IaaS), and many other hybrid cloud models. While different in terms of offerings and functionality, all cloud platforms rely on critical services and related policies, procedures, and processes for ensuring their confidentiality, integrity, and availability (CIA).
Currently, the most widely recognized security assessment performed on cloud based businesses is the American Institute of Certified Public Accountants (AICPA) System and Organization Controls (SOC) 2 audit. What makes SOC 2 such a well-known and highly respected auditing platform, one that’s embraced by thousands of companies around the world?
First and foremost, the American Institute of Certified Public Accountants (AICPA) – has done a remarkable job of branding itself – and its frameworks – as the de facto standard for third-party assurance auditing. So let’s take a look at some important things to know about SOC 2 audits.
8 Things to Know About SOC 2 audits
1. It is a globally accepted – and well-recognized – framework. From Southeast Asia to North America, Europe, and everywhere else, the SOC 2 framework is well-known, well-recognized, and well-used. It’s really the global de-facto assurance standard for assessing controls at a third-party organization – and it’s growing in adoption.
2. Technology companies are prime candidates. Technology just continues to explode and transform the world we live in, and with big changes comes big compliance responsibilities for companies. The tech sector has grown dramatically in recent years, and perhaps the biggest compliance mandates for such entities has been SOC 2 audits. SaaS businesses, software development houses, companies focusing on big data and data analytics – they’re all prime candidates for SOC 2 compliance.
3. Compliance “can” be challenging. It “can” be, but it doesn’t have to be. SOC 2 audits require a tremendous amount of planning and preparation, then there’s the execution part of it also. You need good people throughout the process, and you also need good auditors helping guide you through the entire audit from beginning to end. And what you need is a roadmap with clearly defined objectives, milestones and deliverables. Again, a good auditor can provide all of this, and much more.
4. A Scoping & Readiness Assessment is crucial. Beginning a SOC 2 audit the right way – one that results in an efficient and cost-effective process – starts by performing an upfront SOC 2 scoping & readiness assessment. The benefits of such an assessment are plentiful; here are a few to highlight. First and foremost, identifying scope in terms of what controls are to be assessed is critical.
5. Remediation is common, so relax. Very common, so it’s nothing to be concerned about. As to remediation, it usually consists of documentation remediation and technical and operational remediation. For documentation creation, it’s about developing all the necessary policies and procedures for SOC 2 compliance – access control, incident response, data backup, usage policies, and more. As for technical and operational remediation, it’s about making configuration changes to IT systems for enhancing security measures that are often a requirement for SOC 2 compliance.
Businesses often find they need assistance with both documentation remediation and the technical and operational remediation. We can assist with both, so contact us today to learn more.
6. There are Two Types of SOC 2 audits. A SOC 2 Type 1 audit is an assessment performed for a specific date, such as June 30, 20xx, while a SOC 2 Type 2 audit covers an actual test period, such as January 1, 20xx to June 30, 20xx. Mot service organizations new to SOC 2 reporting begin with a Type 1, followed by Type 2 audits in subsequent years. If you have an immediate request for Type 2 compliance, we can assist as needed.
7. Continuous Monitoring is the Norm. What’s “continuous monitoring”? It’s the measures put in place “after” a service organization has obtained SOC 2 compliance. More specifically, it’s about regularly assessing one’s policies, procedures, and related processes. It takes an internal champion to put forth such measures, but it must be done or annual compliance will become much more challenging. NDB offers comprehensive continuous monitoring efforts for helping service organization stay compliant, so contact us today to learn more.
8. Annual Compliance is here to stay. Yes, it is, and it’s not going away – rather – it will only continue to grow and become more challenging, more complex, and more time-consuming. All the more reason to work with a CPA firm that provides fixed-fees, superior services, and so much more.
NDB. North America’s SOC 2 Leaders
NDB offers comprehensive SOC 2 compliance services and solutions from coast to coast. Our fixed-fee services, coupled with superior knowledge makes us a great fit – and a household name all throughout the country. To learn more, contact us today at 1-800-277-5415, ext. 706 and speak with CPA Christopher Nickell.