A SOC 2 audit aims to discover if an organization has secure and sufficient procedures and policies to protect vital corporate data. With the emphasis on data privacy these days, companies outsourcing their cloud infrastructure, colocation, data processing, and data hosting can generate a positive buzz if they can pass their SOC 2 audit with flying colors.
System and organization controls (SOC) are standards that assist in gauging the performance of a service organization in regulating, defending, transmitting, maintaining, processing, disposing, and sensitive customer data.
But for organizations that are growing in scale, how long does a SOC 2 audit take?
The Duration of a SOC 2 Audit: Type I and Type II
At a rough estimate, a SOC 2 audit typically spans four weeks up to eighteen weeks to complete. Critical factors include the following:
- Maturity of cybersecurity defense
- Project complexity
- Motivation behind audit
- Variations of the reporting process
The actual timeline is mainly dependent on the type of audit, whether it’s Type I or Type II.
Selecting Between Type I and II SOC 2 Audit
Type I
Type I audits are at a specific point in time and include a detailed description of the organization’s security controls during the particular time frame. In addition, the report outlines an opinion of the design of the controls.
Because Type I reports are of a point-in-time, regulators can conduct an audit immediately if all the security controls and documentation are present.
If the controls are not yet present, a readiness assessment must first happen, followed by a period of remediation.
SOC 2 Type I auditors will test the reliability of each security control to see if it passes industry standards.
Type II
Type II reports also cover a time; usually a minimum of six months. But the industry standard is to cover an entire year so that there will be no coverage gap for the reports.
This report covers a thorough assessment of controls and an expert opinion on its design and effectiveness over the prescription time.
A period of time must elapse wherein the security controls are operating. For example, during an initial examination, a report generation may take from nine to twelve months.
SOC 2 Type II audits usually build on the findings of a Type I report as it reflects the overall digital health of the organization over some time. Auditors will still choose samples and then carry out tests to assess their reliability. The audit repeats every year, with organizations electing to time it at every end of a calendar quarter.
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The Purposes and Benefits of a SOC 2 Audit
The SOC 2 audit gives a positive reflection of the responsibility and professionalism of a company in managing sensitive corporate data. Its certification comes from an independent certified public accountant who can categorically say that your organization passed the industry standards.
The report is unassailable proof that the company passed the attestation and risk management standards of the American Institute of Certified Public Accountants (AICPA).
The advantages of a SOC 2 audit all give an organization a competitive advantage in the industry they are in:
- Increase in customer trust
- Better organizational reputation
- Data protection
- More personnel vulnerability awareness
- Strengthening of cybersecurity
Preparing for the Audit
- Planning and Strategy
Careful strategy and planning can save your organization time and resources to prepare for the report. At this stage, corporate decision-makers should decide what trust services criteria should be in the report’s scope and the extent of the system that will undergo the audit.
Building a financial model to understand the revenue of the cybersecurity system at risk is essential. Effective methodologies include FAIR (Factor Analysis of Information Risk) to help organizations understand risks in financial gains or losses.
The audit firm usually sends a complete list of information requests in advance of the SOC 2 audit. This early in the process, the organization can already see items missing in the checklist. Some of these gaps may include HR documentation, asset inventory, and information security policy.
This phase of the preparation should take between one to three weeks to gain the consensus of the stakeholders.
- Gap Analysis and Readiness Assessment
Many companies opt to have a pre-audit gap assessment, a dry run of sorts, to see if the organization can pass the SOC 2 requirements.
The gap analysis takes about two to four weeks to finish. An external and independent auditor will assess the digital environment of your organization and see if it complies with the SOC 2 requirements, particularly the trust services principles:
- Security
- Availability
- Processing integrity
- Confidentiality
- Privacy
Many of the audit activities are performed on-site, mainly if it involves physical features. Typical deficiencies encountered during gap analysis include the following:
- Lack of core policies
- Employee background checks
- Inferior password complexity
- Missing trust service principles from the scope
The gap analysis should take between one to eight weeks.
- Remediation
A successful gap analysis will find vulnerabilities and deficiencies that an organization must address. However, the duration of the remediation phase will depend on how dedicated the company is to find solutions to the raised problems.
Cost efficiency and fast resolutions will hinge on the company’s expertise in managing the project with goals and milestones. For example, the typical timeline for remediation is one to twelve months.
- Audit Field Work
After remediation, the organization can commence with the audit fieldwork, where the auditors will examine the evidence required for the SOC 2 report. The process is a mix of remote and on-site work that takes between one to three months.
- Audit Report and Wrap-Up
The fieldwork ends with the audit firm writing the final SOC 2 report for compliance with AICPA requirements. The organization will have an opportunity to review the report before its final issuance.
Audit firms must meet the professional standards of PCAOB and AICPA by detailing the documentation of the audit work and the archiving of evidence. The audit work itself is subject to peer review.
The process lasts for about one to five weeks, depending on how many review comments exist from internal stakeholders. The SOC 2 report is a yearly requirement that an organization should prepare for to maximize cost efficiency.
The SOC 2 Report in a Nutshell
The SOC 2 report is documentation that reflects the transparency of a service organization about its internal controls. It assures the stakeholders that the company can securely contain sensitive corporate data of its clients and business.
Information security is at the forefront of the report outlines the following aspects:
- Software
- Personnel
- Digital infrastructure
- Data storage
- Data processing
The audit report will transparently outline the measures of the service organization to defend data privacy from cybercriminals. It is a positive reflection of the excellent performance of the company to comply with information security laws.
The Trust Services Criteria
The Trust Services Criteria (TSC) is a set of guidelines from the AICPA Assurance Services Executive Committee (ASEC). Its purpose is to evaluate the reliability and effectiveness of security controls.
There is an urgent recognition of the risks that threaten the ability of the organization to perform the expectations for the Trust Services Criteria. The threats emanate from the following sources:
- Industry of the organization’s operations
- The environment of the industry
- Sensitive information generated and stored
- Commitments to customers and third-parties
- Responsibilities from the operation of the entity
- Technology and delivery channels
- Interaction with third-parties (service providers and suppliers)
- Changes to system operations and controls
- Changes to processing volume
- Legal regulations for compliance
With these factors, the AICPA drafted the following TSCs that will help auditors do a thorough assessment of the capability and reliability of service organizations.
- Security
Security is the standard criteria of the TSC and is the only critical aspect. Service organizations have the burden of proving in the SOC 2 audit that they have robust protection against cybercriminals and unauthorized access. The risks of digital attacks are real, and they can significantly compromise the security of clients and the company’s reputation.
- Availability
Service organizations must prove that their systems are available at all times, specifically when clients need access.
- Processing integrity
Auditors will look for indications that the processing strength of the organization occurs at an accurate and timely rate.
If the service organization operates in financial services and e-commerce, this TSC is a vital certification to bolster integrity. When an organization passes this TSC, it will prove to clients that the company offers accurate, authorized, complete, timely, and valid services.
- Confidentiality
Companies that handle and maintain corporate data must show that they can protect the clients’ confidentiality and personal information. The AICPA defines confidentiality as protecting personal information upon commitment or agreement of both the organization and clients.
Personal information includes any data that can refer to the individuality of a person. It may consist of any of the following:
- Name
- Home
- Email address
- Identification number
- Physical attributes
- Purchase history
- Medical conditions
- Financial log
- Criminal background
- Privacy
Privacy is another aspect of information security that auditors will look for in a SOC 2 assessment. Service organizations must prove that they never compromise clients’ privacy because this can cause irreparable damage when left vulnerable.
The fundamental difference is that privacy protects personal information and data, while confidentiality only covers personal data.
The AICPA refers to privacy as protecting clients with their commitment through a notice and may include collecting, utilizing, retaining, disclosing, and destroying sensitive information. It follows the guidelines of the generally accepted privacy principles (GAPP).
The Security TSC is the non-negotiable requirement for all five Trust Services Criteria that all service organizations must pass. The remaining four can be included upon the organization’s request, especially if their product or service is highly dependent on the other criteria for good performance.
Security Excellence in SOC 2 Audit Guidance
RSI Security is the leading name when it comes to compliance and cost-efficiency. Our team can help you pass your SOC 2 Audit with above-average scores. Data protection and security are the key strengths of our firm, and we will help you secure your customers’ sensitive data.
For SOC 2 compliance, documentation is essential. RSI Security will work closely with your teams to assign tasks and status updates. We will function as a central hub of all critical files needed for the audit. With our expertise and understanding of what auditors require ahead of time, your organization will have the advantage of foresight.
SOC 2 reports are highly specialized according to the profile and characteristics of the organization. RSI Security will help you find the best fit for your organization’s compliance to the Trust Service Criteria (TSCs). Set up an appointment with RSI Security for a consultation.