SOC 2

In today’s interconnected business environment, companies increasingly rely on third-party vendors to enhance their operations, streamline services, and improve efficiencies. However, this dependency comes with significant risks. Third-party risk management (TPRM) has become crucial as organizations seek to protect sensitive data and maintain regulatory compliance. One of the most effective frameworks for managing third-party risk is the Service Organization Control 2 (SOC 2) report. In this blog post, we’ll explore how SOC 2 helps ensure vendor security and bolster third-party risk management.

Software-as-a-Service (SaaS) businesses handle sensitive information for their clients, thus ensuring robust security measures is critical. One way SaaS companies can demonstrate their commitment to security is through SOC 2 compliance. SOC 2 (System and Organization Controls 2) is a framework that outlines how organizations should manage customer data based on five “trust service criteria”: security, availability, processing integrity, confidentiality, and privacy. Let’s explore how SOC 2 compliance specifically benefits SaaS providers.

The System and Organization Controls (SOC) 2 report, developed by the American Institute of CPAs (AICPA), has become a crucial standard for evaluating and demonstrating an organization’s commitment to security, availability, processing integrity, confidentiality, and privacy. These five principles, known as the Five Trust Services Criteria, are the cornerstone of SOC 2 compliance and offer a framework for companies to build and maintain trust with their stakeholders. Keep reading to discover what the Five Trust Services Criteria are and what they mean for your business.

In the complex realm of cybersecurity, many organizations face the challenge of navigating a multitude of frameworks and standards to protect their data. Among these, SOC 2 compliance stands out, especially for service-oriented businesses. Developed by the American Institute of CPAs (AICPA), SOC 2 provides essential guidelines for managing and securing client data. Understanding SOC 2 and achieving compliance can be daunting, but it’s crucial for safeguarding sensitive information and demonstrating your commitment to security.

The American Institute of Certified Public Accountants (AICPA) manages various certification programs for service organizations, including those for software-as-a-service (SaaS) providers. If clients are concerned about how a SaaS company secures their data, a System and Organization Controls (SOC) 2 Type 2 report offers tangible assurance of trust. SOC 2 Type 2 certification enhances customer confidence, reduces incident impact, and simplifies compliance.

SSAE 18 is a set of standards governing service organizations’ security practices. It’s used to identify and manage risks involved in handling consumer data. Many organizations need to showcase compliance with SSAE 18 standards through SOC audit reports. While SSAE 18 Type 2 is often misused to refer to SSAE 18 SOC 2 Type 2 reports, the usage is commonly accepted. SOC 2 reports closely follow guidelines laid out in SSAE 18, especially for service organizations that utilize subcontractors or sub-service organizations. 

Service organizations that need to become SOC 2 compliant often struggle with scoping out their SOC 2 Report. Other issues include covering gaps in the control layout and allocating the resources needed for an audit. Working with a compliance partner helps solve for all of them.

Preparation for a SOC 2 Type 2 audit comprises four essential steps:

• Establishing an accurate implementation and assessment scope
• Implementing the Common Criteria from the SOC 2 Type 2 controls list
• Installing any Additional Criteria controls that may be required of you
• Conducting the assessment and reporting on your SOC 2 compliance

Preparing for a SOC 2 audit? To figure out which type you need, ask the following questions:

SOC 2 compliance ensures service providers meet client expectations for data security, and it offers the best value when implemented efficiently. To do so, organizations need to scope and install controls intentionally, prioritizing necessities for the specific kind of audit they’re targeting.