What is SOC Compliance?

Quantifying and ensuring security and resilience is increasingly essential for many organizations’ operations. That includes the need for their suppliers, vendors, and partners to demonstrate a certain level of secure practices.

While government regulations like GDPR in the EU or HIPAA for US Healthcare increasingly regulate and ensure certain security controls, other industry standards have become increasingly popular for businesses to demonstrate that they respect their customers’ data and can be trusted to handle it securely.  SOC is one of the most common of these standards.  Keep reading to learn what SOC is, what security SOC audits validate, and the basic steps an organization must take to achieve SOC compliance.  

What is SOC?

Short for System and Organization Control, distinct from the other type of SOC (Security Operations Center) that we often discuss in cybersecurity.  SOC compliance standards were developed by the American Institute of Certified Public Accountants (AICPA) but have also become important standards for cybersecurity in business settings.

Fundamentally, SOC compliance demonstrates an organization’s commitment and ability to ensure data security. Service organizations typically use SOC examinations to prove that they can be trusted to handle, interact with, and use a client’s data to provide services without compromising it. There are a series of different SOC standards, SOC 1, SOC 2, and SOC 3, respectively, that demonstrate various levels of maturity and focus on other areas of data security.  

Why would you need SOC?

SOC certifications are primarily a tool that organizations and companies use to demonstrate that they are safe to work with for other third parties. It’s one critical tool available for managing [supply chain risk]. Because you rarely have deep insight into the security controls of your vendors and suppliers, and questionnaires can be answered hastily and sloppily, it can be hard to validate that they are operating securely. SOC audits help demonstrate that an organization isn’t a potential source of disruption or data loss for your organization. 

SOC certification audits are conducted by independent auditing teams to the standards set by AICPA, providing a consistent, reliable indicator of an organization’s data protection measures and reliability.  

Different types of SOC Audit

While there are three main types of SOC certification, it’s also important to note that each can be awarded by a different type of audit, Type 1 or Type 2.  A Type 1 audit assesses all the controls an organization has in place and verifies that they are working.  It’s effectively a momentary snapshot of the organization’s compliance.  A Type 2 audit is an extended test of the organization’s controls that ensures they are maintained, managed, and enforced correctly. Type 2 audits effectively validate the ability of an organization to sustain compliance over time. 

SOC 1 

SOC 1 primarily focuses on ensuring adequate controls around an organization’s financial operations and reporting. That’s why you’ll rarely see much focus on it in the cybersecurity space. It primarily ensures that financial information is recorded, transmitted, and handled accurately.  However, some components of SOC-1 focus on ensuring that the audited organization takes the necessary measures to secure their clients’ financial information. If you process payments from consumers or other organizations, a SOC 1 audit would demonstrate that you take necessary steps to prevent that information from being accessed or stolen by threat actors.

SOC 2

SOC 2 is much more directly relevant to cybersecurity concerns. Tech services companies typically seek this certification in areas such as IT, network, security, and others.  SOC 2 audits test that a service provider can securely handle and manage a client’s data.  It is broken down into five separate “Trust Services Criteria:” security, availability, processing integrity, confidentiality, and privacy. 

  • Security: How an organization prevents unauthorized access
  • Availability: How resilient an organization is to disruptions or possible downtime
  • Processing Integrity: How accurately and reliably the organization handles data
  • Confidentiality: How an organization operates access controls and protects sensitive data
  • Privacy: How well an organization secures its customer’s Personally Identifiable information.
 

SOC 3

SOC 3 examinations cover the same systems and topics that SOC 2 does but are intended for different organizations and users. SOC 3 reports focus on the same five “Trust Service Criteria as SOC 2 but present their findings at a higher level, with fewer technical details. The intended use of SOC 3 audits is for larger companies with a larger consumer or business customer base to release publicly.  For example, Microsoft Azure undergoes SOC 2 and 3 testing on an annual basis and releases the SOC 3 report publicly.

How do I get a SOC certification?       

Obtaining a SOC certification can be a challenging and involved process for an organization.  Being well-prepared is essential for success.

  1. Determine the Appropriate SOC Category: Based on your organization’s needs and the nature of the data you manage, determine whether SOC 1, SOC 2, or SOC 3 (or a combination) is most appropriate. Consider your client base, the data type processed, and the specific assurances your clients seek. 
  2. Select the Audit Type: Decide if a Type 1 or Type 2 audit best suits your requirements. Type 2 audits typically last at least six months and can span up to a year, so they require substantial planning and preparation.  
  3. Engage a Qualified Auditor: Choose a firm certified by the AICPA to conduct SOC examinations. The auditor must be independent and not involved in creating or managing your organization’s controls
  4. Prepare for the Audit: Conduct a readiness assessment internally or with a consultant’s help. This step is crucial as it identifies gaps in your current controls relative to the SOC criteria. Addressing these gaps before the formal audit can significantly smooth the process.
  5. Document Your Control Activities: Develop comprehensive documentation describing your control environment, risk assessment processes, and control activities. This will include policies, procedures, and evidence of the operational effectiveness of controls.
 

By following these steps, you can effectively prepare for the SOC certification process, providing key stakeholders with confidence in your data management and protection practices. This enhances trust and contributes to your organization’s operational credibility and success.

Conclusion with CTA:

SOC certifications serve as a benchmark for security excellence, assuring that an organization adheres to high data protection and operational integrity standards. This is crucial for building trust with partners, vendors, and customers who rely on your organization’s ability to safeguard their sensitive information.

Achieving SOC certification demonstrates a proactive approach to cybersecurity, reflecting your commitment to securing client data against the evolving threats in the digital world. It’s an investment in your organization’s future, enhancing your reputation and competitive edge by proving that you prioritize and effectively manage security at every level.

If you’re ready to elevate your security standards and pursue SOC certification or need expert guidance on navigating the complexities of the SOC compliance landscape, reach out to an Atlantic Data Security advisor today. Our team is equipped to support you through the certification process, ensuring that your security controls are compliant and optimized for modern cybersecurity challenges. Let us help you secure your operations and protect your most valuable digital assets. Contact us today to get started on your path to SOC certification.

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