Know How To Perform A SOC 2 Audit: What’s The Process Involved

Choosing to embark on the journey towards a formal SOC 2 report signifies a critical step in fortifying your organization’s data security posture. Undoubtedly, you may find yourself grappling with questions – How do we proceed with a SOC 2 audit? What’s the timeline for such an audit? What preparations are necessary, and who should be on board? In this blog, we will demystify the SOC 2 audit process, know to prepare it, and the expected timelines. So let’s get started!

What Is A SOC 2 Audit?

A SOC 2 Audit, or System and Organization Controls 2 Audit, is a comprehensive examination designed to ensure that service providers are securely managing data, in a manner that safeguards the privacy and interests of their clients. It was established by the American Institute of Certified Public Accountants (AICPA) as a standard for managing customer data based on five ‘trust service principles’: Security, Availability, Processing Integrity, Confidentiality, and Privacy.

These audits are crucial for service organizations that store, process or handle customer data. The purpose is to build trust and confidence in the service organization’s system by demonstrating adequate internal controls.

SOC 2 Audit Process: A Step-by-Step Guide

Navigating the landscape of a SOC 2 audit can seem like daunting work. Yet, breaking down the process into digestible, actionable steps can significantly ease the complexity. Here’s a step-by-step guide to help you understand and manage your SOC 2 audit:

Step 1: Choose Your Report Type

The first step is choosing the right report for your organization. A SOC 2 Type I report focuses on the design of controls at a specific point in time and is typically the starting point for organizations new to SOC 2. A SOC 2 Type II report, on the other hand, examines both the design and operational effectiveness of controls over a minimum of six months, providing a more comprehensive and robust view of your data security strategy.

The choice between a Type I and Type II report often depends on the expectations of your stakeholders, the maturity of your control environment, and your organization’s readiness to undergo a more thorough and rigorous review.

Step 2: Define the Scope of Your Audit

Defining the scope of your audit involves a careful evaluation of your systems, services, and data-handling processes. You should identify the aspects of your operations that handle sensitive data and include them in the audit. In addition, you need to determine which of the five trust service principles apply to your organization. Remember, your audit’s scope should address all areas of potential risk in terms of data security, availability, processing integrity, confidentiality, and privacy.

Step 3: Conduct a Gap Analysis

In this step, your aim is to assess your current situation against the SOC 2 standards. Through gap analysis, you can actively identify and address any shortcomings or ‘gaps’ in your existing controls to meet the SOC 2 requirements. This is an invaluable step that helps you prepare for the audit by identifying areas for improvement and setting the stage for a successful SOC 2 certification.

Step 4: Complete a Readiness Assessment

The readiness assessment serves as a mock audit, allowing you to test your controls and processes before the actual audit begins. This assessment helps your organization understand if your control environment is ready for a SOC 2 audit, providing insights on any areas that need improvement. By the end of this step, your organization should feel confident in its preparedness for the formal audit.

Step 5: Select an Auditor

Selecting the right auditor is a crucial step in your SOC 2 journey. The auditor should be a licensed CPA firm with a deep understanding of the SOC 2 standards, as well as your industry and its unique challenges. A seasoned auditor can provide valuable insights and guidance, helping you navigate the audit process smoothly.

Step 6: Begin the Formal Audit Process

With all the preparation completed and a capable auditor selected you’re ready to begin the formal audit. The auditor meticulously examines your organization’s controls, based on the defined scope and applicable trust service principles. Once the auditor completes the audit, they will produce a SOC 2 report detailing their findings. This report serves as tangible proof of your dedication to data security and privacy.

Is SOC 2 Audit Mandatory and How Often Should It Be Done?

The question of whether a SOC 2 audit is mandatory often arises, and the answer depends primarily on your organization’s nature and the expectations of your stakeholders.

In regulations, SOC 2 audits are not explicitly mandated by law. However, they are becoming an industry-standard in many sectors, especially in those dealing with sensitive customer data. If you offer services to businesses, they may demand a SOC 2 audit to verify their data’s protection

As for the frequency of SOC 2 audits, it’s generally recommended to renew your SOC 2 report annually. This is because an annual SOC 2 audit helps maintain trust and transparency with your customers and stakeholders by showing your ongoing commitment to data security.

How Long is a SOC 2 Audit?

The duration of the audit largely depends on several factors, including the scope of the audit, the readiness of your organization, and the type of SOC 2 report you are seeking.

If you’re pursuing a SOC 2 Type I report, which examines the design of controls at a specific point in time, the audit process typically takes between 6 to 8 weeks. This timeline includes all the stages from readiness assessment and gap analysis through to the issuance of the final report.

However, if you’re going for a SOC 2 Type II report, the timeline extends significantly. A Type II report evaluates the operational effectiveness of controls over a minimum period of six months. Hence, the audit process can take anywhere from six months to a year, considering the time required for the readiness assessment, gap analysis, six-month observation period, and the final report’s preparation and issuance.

Conclusion

In conclusion, performing a SOC 2 audit is a big job, but it’s worth it. It demonstrates your serious commitment to data security and establishes your trustworthiness in handling sensitive information. You need to remember that a SOC 2 audit isn’t just a one-time thing. To keep showing that you’re trustworthy, you should have one every year.

And 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.