Know How Much Does A SOC 2 Compliance Cost?

In today’s digital landscape, safeguarding sensitive data is paramount for businesses. SOC 2 compliance has emerged as a trusted framework for assessing and validating the security practices of service providers. However, one burning question remains: How much does SOC 2 compliance actually cost? Join us as we delve into this fascinating topic, exploring the factors that influence the expenses associated with achieving and maintaining SOC 2 compliance.

Contents

1 Factors Affecting SOC 2 Compliance Cost
2 Costs of SOC 2 Compliance
- 2.1 SOC 2 Type 1 Compliance Costs
- 2.2 SOC 2 Type 2 Compliance Costs
3 Duration of SOC 2 Certification
4 Practical Ways to Reduce SOC 2 Compliance Costs
5 Conclusion

Factors Affecting SOC 2 Compliance Cost

The cost of SOC 2 certification varies widely among businesses, and this variability is primarily due to several key factors that affect the overall expense. A deeper understanding of these elements will provide a clearer picture of what your organization might expect to spend on SOC 2 compliance.

The Complexity of the Organization’s Environment

The complexity of your IT environment significantly influences the cost of SOC 2 certification. An organization with multiple systems or a complex network infrastructure might need to invest more time and resources in establishing and maintaining the necessary controls for compliance.

Size of the Organization

The larger the organization, the more expansive the scope of the audit, and consequently, the higher the cost. Larger organizations often have more complex structures and processes, leading to increased auditing fees and potential technology investments.

Current State of Security Controls

If your organization already has robust security controls in place that align with SOC 2 requirements, the cost of achieving compliance could be less. However, if you need to develop and implement several new controls, you can expect to invest more in both technology and professional services.

The Scope of the Audit

The scope of the audit – whether it’s a Type 1 or Type 2 – also plays a significant role in determining the cost. A Type 2 audit, which assesses the operational effectiveness of controls over time, is more extensive and thus more expensive than a Type 1 audit, which is a snapshot of the controls at a given point in time.

Choice of Trust Service Criteria

SOC 2 reports can be based on one or more of the Trust Service Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy. The more criteria your organization chooses to include in the audit, the higher the overall cost of SOC 2 certification will be.

Consultant and Training Expenses

Should you decide to enlist the assistance of a consultant for preparation and guidance, this will add to your costs. Similarly, training your employees on SOC 2 requirements and new controls can also entail additional expenses.

Costs of SOC 2 Compliance

Before we dive into the costs, it’s important to comprehend what differentiates SOC 2 Type 1 from SOC 2 Type 2.

SOC 2 Type 1 evaluates whether your system meets the Trust Services Criteria at a specific point in time. It is essentially a snapshot of your organization’s controls.
SOC 2 Type 2 extends on the Type 1 report, examining the operational effectiveness of your controls over a minimum six-month period.

SOC 2 Type 1 Compliance Costs

The costs of obtaining SOC 2 Type 1 compliance are generally lower because it’s a less rigorous audit that involves fewer resources. Here is a breakdown:

Auditing Fees: As a less complex process, Type 1 audits might cost anywhere between $15,000 to $30,000.
Technology Investments: Initial investments in technology to meet the audit’s controls could cost up to $10,000, but this varies widely depending on the current state of your IT infrastructure.
Training Costs: Basic awareness training for staff to comprehend SOC 2 compliance requirements might cost around $2,000 to $5,000.
Employee Time: Staff would need to dedicate time to the audit preparation and training, which could be considered a cost of approximately $5,000.
Opportunity Costs: Any delays to projects due to the focus on SOC 2 compliance could be quantified as around $3,000 to $6,000.

SOC 2 Type 2 Compliance Costs

SOC 2 Type 2 compliance entails higher costs due to the more stringent and lengthy nature of the audit. Here’s a cost estimation:

Auditing Fees: Due to its complexity, Type 2 audits typically cost between $30,000 to $60,000.
Technology Investments: Since the audit is over a longer period, your business may need to invest more in technology upgrades or additions, possibly costing up to $15,000 to $20,000.
Training Costs: As staff needs to maintain the controls over an extended period, ongoing training would be necessary, costing between $5,000 to $10,000.
Employee Time: Staff members would need to devote more time to maintaining compliance over the audit period, which could equate to costs of $10,000 to $15,000.
Opportunity Costs: The extended focus on compliance may lead to more significant project delays, possibly equating to $8,000 to $12,000.

Duration of SOC 2 Certification

A SOC 2 certification process typically occurs in two distinct stages: the readiness assessment phase and the audit phase.

Readiness Assessment Phase – The readiness assessment phase is when your organization prepares for the audit. This includes identifying the controls that need to be put in place, implementing them, and ensuring employees are trained on their importance and use. This phase usually takes between one to three months.
Audit Phase – After the readiness phase, the auditor inspects your environment, processes, and controls. For a SOC 2 Type 1 report, this phase typically takes about one month as the audit focuses on the design of controls at a point in time. For a SOC 2 Type 2 report, this audit phase can take six months or more because it assesses the operating effectiveness of your controls over a defined period.

Practical Ways to Reduce SOC 2 Compliance Costs

Practical Ways to Reduce SOC 2 Compliance Costs SOC 2 compliance is a significant investment, but there are ways to manage and potentially reduce these costs. Here are some effective strategies:

Leverage Existing Controls – If you already have security controls in place, align them with SOC 2 requirements. This approach can save the time and resources required to build new controls from scratch.

Utilize Technology Solutions – Cloud-based solutions and automated tools can simplify compliance processes and reduce the need for extensive manual effort and resources.

Continuous Training and Awareness – Regularly train your employees about SOC 2 requirements. Well-informed employees can help prevent costly mistakes or oversights.

In-House Expertise – Develop internal expertise on SOC 2 compliance. Having knowledgeable staff can reduce reliance on external consultants, saving you money.

Regular Internal Audits – Regular internal audits can help identify gaps before they become major issues, potentially saving you from costly remediation later.

Conclusion

In conclusion, understanding SOC 2 compliance costs is not just about calculating the direct costs of audits, technology, and training, but also about appreciating the indirect costs like employee time and opportunity costs. By understanding these expenses and strategically managing them, your organization can turn SOC 2 compliance into a value-added component of your business operations.

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.

How Much Does A SOC 2 Compliance Cost? Here’s The Detailed Breakdown