Businesses that process client data need to find ways to make their valued clients trust them. Whether your business is storing delicate financial information, transporting medical records, or processing intricate biographical details, it’s important to follow the SOC 2 guidelines set out by the American Institute of CPAs (AICPA). But what do these guidelines entail? What does SOC 2 certification cost, and what factors impact and influence cost?
These are just a few of the questions most executives ask when it comes to SOC 2 compliance.
Before you start shopping for an auditor, it’s important to know what price you can expect to pay, as well as what your investment should return.
How Much Does SOC 2 Certification Cost?
The total price you pay for SOC 2 compliance, including all preparation before the audit and patchwork needed during and after, can be quite high. According to one estimate, companies can expect to budget upwards of $145 thousand dollars to achieve SOC 2 compliance.
However, that figure takes into account much more than just the actual audits.
The price for individual portions of the SOC 2 compliance process can be much lower, whether purchased piecemeal or bundled. In the sections that follow, we’ll break down what each type of SOC 2 report costs, as well as what factors impact those costs for your specific company. We’ll also address a cost-saving method that can help you achieve SOC 2 compliance efficiently.
But first, let’s define the actual guidelines we’re talking about.
What is SOC 2 Certification?
SOC 2 is a standard reporting procedure regarding a service organization’s system and organization controls (SOC). Service organizations are those that provide software, hosting, and other virtual and logistical services to clients. They achieve SOC compliance for various reasons, including local legal requirements and business norms where they do business.
SOC 2 is the second of three SOC protocols, with SOC 1 related to financial reporting and SOC 3 related to a publicly accessible report on security. Certification with SOC 2 involves a complicated audit based on the trust service criteria (TSC):
- Security – The most important TSC, covering basic safeguards to protect against both internal and external threats like hacking or phishing scams.
- Availability – Assuring easy and quick access to client data for authenticated parties.
- Processing Integrity – The extent to which processes for data processing deliver exactly what is guaranteed in contracts between business and client.
- Confidentiality – Protection of confidential data through encryption and other measures to make sure no one who isn’t authorized has access to it.
- Privacy – Protection of all data, via access management and multi-factor authentication.
Having the technology and practices in place to meet AICPA standards across the five TSC can lead to major costs both before and after your audit.
Overall SOC 2 Compliance Cost Breakdown
Certifying that your organization is fully committed to protecting its clients’ information is expensive. Actually protecting the information, keeping all systems updated and fully functional, is a major reason why. An accurate picture of SOC 2 costs takes all of this into consideration.
The rather large $145 thousand dollar estimate above, factors in far more than the SOC 2 audit itself. However, it’s also worth noting that an SOC 2 audit can come in one of two varieties: SOC 2 type 1 and SOC 2 type 2. Companies may decide to undergo either SOC 2 type 1 or type 2 audit, or even both. Both the direct cost and the other factors related to each can vary widely, especially depending on the context of an institution getting audited.
SOC 2 Type 1 Cost
An SOC 2 Type 1 audit is a test of whether your company meets the TSC at a given point in time. The test itself is a relatively straightforward and quick process that guarantees customer safety as of the moment the test is completed. It’s also relatively affordable, compared to type 2: the source above estimates an SOC 2 type 1 audit to cost roughly $12 to $17 thousand dollars.
What accounts for the gap between $12 and $145 thousand dollars? Hidden costs.
Although the SOC 2 test is a short and simple process, preparation can be arduous. One or more senior-level employees need to devote their time, or else an outside contractor must be hired. These costs add up, as preparation can take as long as six months to complete.
SOC 2 Type 2 Cost
The SOC type 2 audit report is a much more involved process. It entails testing the cybersecurity of your institution over a duration of time. This form of audit produces a much more robust and accurate picture of your company’s dedication to cybersecurity. It’s also far more expensive, both in and of itself, and through various corollary costs.
Per another expert estimation, an SOC type 2 audit can cost $20 to $80 thousand dollars just the test itself. And, just like SOC 2 type 1, the test is hardly the only cost.
SOC type 2 certification also requires a lengthy and expensive preparation period. Plus, the test itself lasts much longer, which can incur delayed or even halted productivity until it’s completed.
Biggest Factors Impacting SOC 2 Compliance Cost
As we’ve been touching on, the cost of the SOC 2 test you get, no matter which type, is far from the only expense you need to worry about. On top of paying an external auditor to actually complete the test, you’ll also need to account for:
- Salaries for senior level staff or consultants over a course of six months or more.
- Diminished productivity and services impacted for the duration of the test.
- Legal fees associated with attorneys reviewing all relevant contracts.
- Training for all employees who may be impacted by the audit.
- Building or buying new software for compliance.
In addition, the scale and scope of your services and the particular cybersecurity architecture you have in place, impact both testing and any patchwork needed to get you up to speed.
All-in-one: An Efficient, Cost-Saving Solution
Despite these complexities, SOC 2 certification doesn’t have to be difficult. One of the easiest and most cost efficient ways to achieve SOC 2 certification is to entrust professionals to guide you through the process—for example, RSI Security’s SOC 2 compliance advisory services.
Our suite of SOC 2 services features a robust readiness assessment to speed up your preparation. We’ll work with you to analyze the state of your cybersecurity. Then, we’ll help build out or otherwise install any security features that might be missing, according to TSC standards.
Finally, we’ll conduct the audit, whether type 1 or type 2, only once a successful test can be guaranteed. That way, you don’t waste precious resources on failed tests.
Certification, Compliance, and Cybersecurity: RSI Security
Here at RSI Security, we understand the difficulty that compliance can entail. Between SOC 2 and any other regulatory guidelines you need to comply with, it can be hard for many companies to keep up. This is especially true for startups and other small to medium sized businesses, where IT and cybersecurity budgets can be relatively modest.
That’s where professional, managed IT and cybersecurity services come in.
The expert team at RSI security boasts over a decade of experience providing cybersecurity solutions to businesses of all sizes. To see just how easy cybersecurity can be, and for SOC 2 certification costs that can’t be beat, contact RSI Security today.