SOC 2 is a widely recognized auditing standard developed by the American Institute of CPAs (AICPA). This comprehensive guide provides an in-depth view of the SOC 2 requirements and lays out a roadmap for achieving SOC 2 compliance.
What is a SOC 2 Report?
A SOC 2 Report is a technical audit document that showcases how a service organization manages data to ensure it meets the five Trust Services Criteria: security, availability, processing integrity, confidentiality, and privacy. Prepared by independent Certified Public Accountants (CPAs), it evaluates the extent to which a service organization complies with one or more of the trust principles based on the systems and controls in place.
There are two types of SOC 2 reports:
Type I: This report provides a detailed overview of an organization’s systems and whether they meet the relevant trust criteria at a specific point in time.
Type II: This report provides an evaluation of an organization’s systems over a specified period, typically six months to a year. It includes a detailed description of the controls, the tests performed to assess them, and the results of these tests.
The SOC 2 report is highly valuable to potential and existing clients, as it provides assurance of your organization’s commitment to maintaining a high level of security and privacy. It demonstrates that your organization has established effective controls and processes to safeguard and maintain the integrity, confidentiality, and privacy of your clients’ data.
Who Must Comply with SOC 2 Requirements?
The necessity for SOC 2 compliance primarily applies to service providers that store, process, or transmit customer data. This includes SaaS providers, cloud computing vendors, data processing firms, and IT managed services, among others.
What Are The 5 Principles of SOC 2?
SOC 2 requirements revolve around five primary Trust Services Criteria (TSC): security, availability, processing integrity, confidentiality, and privacy. Each criterion holds unique requirements designed to safeguard customer data.
- Security – The security criterion is the backbone of SOC 2. It necessitates that companies put systems in place to prevent unauthorized access, both physical and digital, to company resources and data.
- Availability – Availability focuses on the accessible nature of a system, ensuring that services are operating and available to meet the entity’s objectives.
- Processing Integrity – This criterion is all about data processing. It ensures that the systems achieve their purpose—delivering the right data at the right price at the right time.
- Confidentiality – Confidentiality safeguards information that is designated ‘confidential’ from individuals or processes that should not have access to it.
- Privacy – Privacy ensures personally identifiable information (PII) is collected, used, retained, disclosed, and disposed of in conformity with the entity’s privacy notice and with criteria set forth in the AICPA’s generally accepted privacy principles (GAPP).
SOC 2 Requirements: A Comprehensive Checklist
To achieve SOC 2 compliance, an organization must satisfy the relevant requirements corresponding to the Trust Services Criteria they have chosen to include in their report. These requirements are broken down into specific controls that reflect the policies, communications, procedures, and monitoring. Below we detail the key questions and scopes that each requirement seeks to address.
To satisfy the security criterion, also recognized as Common Criteria, your organization must show that it is capable of defending its information and systems from unauthorized access, disclosure, and destruction. This is determined through nine separate Common Criteria (CC).
CC1.0 Control Environment:
- Does the company have an adequate control environment?
- Is there a strong leadership team in place?
- Are appropriate talent acquisition and staff training measures implemented?
CC2.0 Communication and Information:
- Are the organization’s data management practices up to standard?
- How is data collected and shared within the organization?
CC3.0 Risk Assessment:
- Are the organization’s risk assessment practices in line with relevant standards?
- How does the company assess and handle financial and technical risks?
CC4.0 Monitoring Activities:
- Are the organization’s compliance monitoring capabilities robust enough?
- What are the internal evaluation and reporting processes like?
CC5.0 Control Activities:
- Is the organization capable of effectively implementing compliance initiatives?
- How are compliance measures adopted across the organization and within its tech stack?
CC6.0 Logical and Physical Access Controls:
- How do the organization’s compliance measures align with its security capabilities?
- How does the company handle data access, management, and deletion?
CC7.0 System Operations:
- Does the organization have the necessary system and operational controls?
- What are the company’s incident response capabilities?
CC8.0 Change Management:
- Is the organization capable of managing change effectively?
- Are there processes in place to handle organizational and policy shifts?
CC9.0 Risk Mitigation:
- Is the organization taking suitable steps to mitigate risks?
- How are internal risks, vendor risks, and partner risks managed?
The availability criterion revolves around an organization’s ability to maintain the necessary technical performance to fulfill its goals and deliver its services.
A1.1 Performance Monitoring:
- Does the company possess the technical capabilities needed to meet its business objectives?
- How does the organization monitor and assess its processing capacity and scalability?
A1.2 System Recovery:
- Is the organization capable of effective recovery from disruptions?
- Are appropriate contingency infrastructure and data backup processes in place?
A1.3 Recovery Testing:
- Does the company test its recovery protocol?
- How viable is the organization’s recovery process in real-world situations?
The confidentiality criteria focus on how an organization manages the exchange of sensitive information.
- How does the organization handle confidential data?
- What measures are taken to identify sensitive information and prevent compromise?
C1.2 Data Disposal:
- How does the company dispose of confidential data?
- Are there appropriate information disposal practices in place?
Processing Integrity Criteria
The processing integrity criteria evaluate whether a company’s data storage, processing, and retrieval align with its business objectives.
PI1.1 Data Processing Objectives:
- Does the company clearly understand its data processing goals and metrics?
- What measures are taken to develop actionable data performance metrics and targets?
PI1.2 Input Quality Control:
- Does the organization ensure the quality of system inputs affecting its products, services, and reporting?
- What is the focus on input quality control?
PI1.3 Data Processing Quality:
- Does the company have effective measures for maintaining data processing quality?
- What policies and procedures are in place for data processing systems?
PI1.4 Output Quality:
- Can the organization output high-quality data according to internal or external demands?
- How efficient and effective are the data processing capabilities?
PI1.5 Data Storage Systems:
- Does the company have adequate data storage systems?
- How are inputs, processing information, and outputs stored?
The privacy criteria set firm controls around a specific type of sensitive data: personally identifiable information (PII).
P1.0 Notice and Communication:
- Does the company properly inform relevant parties of their data privacy objectives?
- How do clients understand the goals of the company storing their personal data?
P2.0 Choice and Consent:
- Does the company communicate the choices relevant parties have regarding their data?
- How is clients’ authority over their data safeguarded?
- Can the company collect PII while achieving its data privacy goals?
- How do the front-end PII processes match the company’s stated objectives?
P4.0 Use, Retention, and Disposal:
- Does the company have proper measures regarding the use, retention, and disposal of PII?
- How is the rest of the PII lifecycle managed?
- Do relevant parties have necessary access to review, correct, and update their PII?
- How is access to their PII granted to clients?
P6.0 Disclosure and Notification:
- Does the company follow appropriate PII disclosure and breach notification practices?
- How are post-compromise communication practices managed?
- Can the company maintain its PII stores accurately, currently, and comprehensively?
- How does the company maintain PII data quality with internal resources and processes?
P8.0 Monitoring and Enforcement:
- Does the company have effective processes to respond to PII questions and issues?
- What are the company’s PII monitoring and enforcement processes?
Achieving SOC 2 compliance is a significant milestone for service organizations that handle sensitive customer data. By adhering to the stringent requirements set forth by the five Trust Services Criteria (security, availability, processing integrity, confidentiality, and privacy), businesses can demonstrate their commitment to protecting client information and maintaining the highest standards of data security.
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.