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SOC 2 compliance, made easySOC 2 Compliance Costs: What to Expect When Budgeting for SOC2?
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What to expect?
Although SOC 2 compliance costs may be expensive, it is an investment that should not be overlooked. As cloud-hosted applications become more prevalent, B2B SaaS companies like yours need to demonstrate their ability to safeguard customer data. SOC 2 Compliance can serve as a reliable means of assuring customers that you have the necessary security measures in place. Therefore, it should be viewed as a worthwhile investment that has the potential to generate significant business benefits in the future.
The cost of SOC 2 compliance can vary depending on a range of factors. These include the type of attestation required, such as SOC 2 Type 1 or SOC 2 Type 2 or both. Additionally, the size of the organization can impact costs, as larger companies typically have higher expenses. The audit scope is another factor, as costs can increase with the number of Trust Service Criteria chosen. Furthermore, the complexity of the organization’s systems and controls can drive up costs, as can the type of auditor selected, with CPAs or firms carrying different price tags. In addition, the costs of SOC tools required for compliance can add up. Finally, the cost of a readiness assessment can vary depending on the type of auditor chosen and is optional.
What is a SOC 2 Certification?
A SOC 2 certification is a type of audit report that attests to an organization’s adherence to the Trust Services Criteria (TSC) established by the American Institute of Certified Public Accountants (AICPA). The TSCs cover security, availability, processing integrity, confidentiality, and privacy of data.
SOC 2 audits are performed by independent auditors who assess an organization’s controls and processes against the TSCs. The certification demonstrates that the organization has implemented and maintains effective controls and procedures to safeguard customer data and ensure its privacy and security.
SOC 2 certification is particularly relevant for service organizations such as cloud computing providers, data centers, and Software-as-a-Service (SaaS) companies that handle sensitive information. It provides customers and stakeholders with assurance that the organization has appropriate controls in place to protect their data.
What does SOC 2 Compliance include?
SOC 2 compliance includes implementing and maintaining effective controls and procedures to ensure the security, availability, processing integrity, confidentiality, and privacy of customer data. The compliance process involves an audit of the organization’s systems and controls by an independent auditor to ensure they meet the Trust Services Criteria (TSC) established by the American Institute of Certified Public Accountants (AICPA).
The TSC covers five areas:
- Security: The protection of data and systems from unauthorized access, theft, damage, or misuse.
- Availability: The assurance that systems and data are available for use as and when needed.
- Processing integrity: The accuracy, completeness, validity, and timeliness of data processing.
- Confidentiality: The protection of data from unauthorized disclosure or access.
- Privacy: The collection, use, retention, and disclosure of personal information in accordance with applicable laws and regulations.
To achieve SOC 2 compliance, an organization must identify the TSCs relevant to its business and implement controls and procedures to meet those criteria. The compliance process typically involves a readiness assessment, remediation of any identified gaps, and an audit by an independent auditor. Once the audit is complete, the auditor issues a SOC 2 report, which provides assurance to customers and stakeholders that the organization has effective controls in place to protect their data.
How Much Does a SOC 2 Type 1 Compliance Cost?
The cost of a SOC 2 Type 1 compliance audit can vary depending on several factors, such as the size and complexity of the organization, the number of Trust Service Criteria (TSC) being evaluated, and the auditor’s fees.
Generally, the cost of a SOC 2 Type 1 compliance audit is lower than that of a SOC 2 Type 2 audit since it evaluates the design of controls rather than their operating effectiveness over a period of time. However, the cost can still be significant, ranging from a few thousand dollars to tens of thousands of dollars, depending on the factors mentioned above.
Some of the costs associated with a SOC 2 Type 1 compliance audit include:
Pre-audit readiness assessment: To ensure readiness for the audit, some organizations may choose to perform a readiness assessment. The cost of a readiness assessment can vary depending on the size and complexity of the organization.
Auditor fees: The cost of the audit itself will depend on the auditor’s hourly rates and the amount of time required to complete the audit.
Technology costs: Depending on the TSC being evaluated, the organization may need to invest in new technologies or upgrades to existing systems to meet the TSC requirements.
Internal resources: The organization may need to allocate internal resources to support the audit process, such as providing documentation and facilitating auditor access to systems and personnel.
It’s important to note that the cost of SOC 2 compliance should be viewed as an investment in the organization’s reputation and the trust that customers and stakeholders place in it. The cost of non-compliance could be much higher, including damage to the organization’s reputation and potential legal and financial liabilities.
How Much Does a SOC 2 Type 2 Compliance Cost?
The cost of a SOC 2 Type 2 compliance audit can vary significantly depending on several factors, including the size and complexity of the organization, the number of Trust Services Criteria (TSC) being evaluated, the scope and duration of the audit, and the auditor’s fees.
Generally, SOC 2 Type 2 compliance audits are more expensive than SOC 2 Type 1 audits because they require the auditor to assess the operating effectiveness of controls over a period of time, usually six months to one year.
The cost of a SOC 2 Type 2 compliance audit can range from tens of thousands of dollars to over $100,000 for larger organizations with complex systems and processes. Some of the costs associated with a SOC 2 Type 2 compliance audit include:
Pre-audit readiness assessment: To ensure readiness for the audit, some organizations may choose to perform a readiness assessment. The cost of a readiness assessment can vary depending on the size and complexity of the organization.
Auditor fees: The cost of the audit itself will depend on the auditor’s hourly rates and the amount of time required to complete the audit.
Technology costs: Depending on the TSC being evaluated, the organization may need to invest in new technologies or upgrades to existing systems to meet the TSC requirements.
Internal resources: The organization may need to allocate internal resources to support the audit process, such as providing documentation and facilitating auditor access to systems and personnel.
Remediation costs: If any gaps or weaknesses are identified during the audit, the organization will need to remediate them to achieve compliance, which can incur additional costs.
It’s important to note that the cost of SOC 2 compliance should be viewed as an investment in the organization’s reputation and the trust that customers and stakeholders place in it. The cost of non-compliance could be much higher, including damage to the organization’s reputation and potential legal and financial liabilities.
What are the total SOC 2 Compliance Costs?
The total cost of SOC 2 compliance can vary depending on several factors, such as the type of SOC 2 compliance (Type 1 or Type 2), the size and complexity of the organization, the number of Trust Service Criteria (TSC) being evaluated, the scope and duration of the audit, the auditor’s fees, and any necessary technology or remediation costs.
As previously mentioned, the cost of a SOC 2 Type 1 compliance audit is generally lower than that of a SOC 2 Type 2 audit. The cost of a SOC 2 Type 1 audit can range from a few thousand dollars to tens of thousands of dollars, while the cost of a SOC 2 Type 2 audit can range from tens of thousands of dollars to over $100,000 for larger organizations with complex systems and processes.
In addition to the audit costs, organizations may also incur costs related to pre-audit readiness assessments, necessary technology investments or upgrades, internal resource allocation, and remediation efforts to address any identified gaps or weaknesses.
It’s important to note that the cost of SOC 2 compliance should be viewed as an investment in the organization’s reputation and the trust that customers and stakeholders place in it. While the costs may seem significant, the potential costs of non-compliance, including damage to the organization’s reputation and potential legal and financial liabilities, can be much higher.
If you are looking to implement any of the Infosec compliance frameworks such as SOC 2 compliance, HIPAA, ISO 27001, and GDPR compliance, Impanix can help. Book a Free consultation call with our experts or email us at [email protected] for inquiries.
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