As more companies move to the cloud and rely on 3rd party services, the need for robust security programs and validation is paramount. Startups — just like other traditional businesses — now achieve SOC 2 compliance to validate security efforts to enterprise organizations, clients, and investors.
This emerging trend requires teams to fully understand the necessary steps that need to be taken in order to become SOC 2 compliant. Since achieving SOC 2 compliance can be a challenge, the following quick-guide is designed to highlight specific areas of this procedure that require strict attention.
Unmasking SOC 2 Compliance
The digitalization of data is on the rise. As a result, data breaches due to online piracy, compromised credentials, and internal theft are becoming commonplace. In 2019 alone, over 164 million records of sensitive data were exposed in the US due to data breaches.
Breaches of such magnitude have far-reaching consequences as stolen data often leads to an influx of identity theft and phishing attacks. If your startup is a victim of a security breach, and your security controls are not up-to-date, your organization could face punitive lawsuits, debilitating fines, and a tarnished reputation that could lead to total closure.
In order to safeguard sensitive data, The American Institute of Certified Public Accountants (AICPA) established a set of security standards to evaluate organizations on their overall security postures and data security practices — SOC 2. In order to achieve SOC 2 certification, organizations must go through an audit with an AICPA approved auditing firm to confirm that the organization’s security measures are up-to-date. Upon successful completion of a SOC 2 audit, your organization will receive a SOC 2 report that can then be passed on to potential partners and clients as a means of proving that your startup has a strong security program and is capable of handling and storing sensitive data.
How Long Does It Take to Achieve SOC 2 Compliance?
Depending on the individual company’s needs, audit scope, budget, and trust service criteria evaluated, audit times can vary quite drastically.
Additional factors like company preparedness and the number of employees and systems involved in a company’s operations can also play a crucial role in the scope and timeline of an audit.
It can take your organization anywhere from two weeks to two months to prepare for the SOC 2 auditing process. Throughout the readiness stage, organizations need to familiarise themselves with all compliance-related requirements and organize and collect all relevant documentation to hand over to the auditors when the time comes.
Types of SOC 2 Reports
There are two types of SOC 2 reports organizations can be evaluated for: SOC 2 Type 1 and SOC 2 Type 2. Upon completion, your company will receive one of two types of reports. Carefully study the differences between the following reports and consider your overall report and certification objectives when preparing for an audit.
A SOC 2 Type 1 report evaluates an organization’s system and implementation of security controls related to the Trust Services Criteria (TSC) at a single point in time.
- Audit is conducted at a single point in time
- Evaluates one or more of the five Trust Services Criteria (TSC)
- Recommended for initial security validation
A SOC 2 Type 2 report evaluates the same set of security controls and Criteria as a Type 1 report, but also evaluates an organization on its operating effectiveness of controls over time.
- Audit is typically conducted over a 3-6 month period
- Evaluates one or more of the five Trust Services Criteria (TSC)
- More widely accepted as security validation by large companies and enterprises
How Much Does a SOC 2 Audit Cost?
How much the auditing process costs all comes down to the auditing firm you choose. Many well-known auditing firms will charge premium rates, regardless of the depth of the audit. Other auditing firms are willing to negotiate, depending on the type (Type 1 and Type 2) and scope of the audit required.
In short, it really depends on the complexity and the number of criteria being evaluated. If it’s your first audit, you can expect to pay more as your necessary control documentation will be in its infancy. Thankfully, after the initial auditing process, subsequent audits will cost less as they are much easier to perform.
Keep in mind, other additional expenses such as legal fees and readiness assessment fees are often present in addition to the original price tag. You may also have to delegate an employee or two to spend time working alongside the firm — which can be a time-consuming task.
In order to meet compliance requirements, businesses often have to adopt new policies and security controls. For this reason, be sure to also factor staff training into your original budget. Remember, a SOC 2 audit is only valid for one year; as such, this process has to be repeated once every 12 months in order to remain in compliance.
Your Company’s Role in Compliance Preparation
The desire to put off a SOC 2 audit in the infancy of a company is understandable. Often, startups have limited access to resources and are typically hyper-focused on product development and innovative patient outcomes rather than security and regulation. Unfortunately, putting off this audit can make things more complicated in the future.
Although your SOC 2 compliance consultant is responsible for the majority of the auditing process, it is your responsibility to put together a skilled team that will work alongside the vendor in order to assist with manual documentation. For this reason, I always recommend conducting a gap analysis. This will allow you to easily identify and correct any imperfections in your data handling operations.
Once the vetting process is complete, If successful, your company will receive a SOC 2 report that outlines your security controls and expert-vetted status.
Achieve SOC 2 Compliance with Dash
For assistance relating to the auditing process, consider Dash ComplyOps. Dash’s solution streamlines the collection of security evidence, creates security policies, and ensures SOC 2 internal controls remain in place through continuous compliance monitoring.
Visit Dash to learn more about how your startup can streamline SOC 2 compliance to achieve SOC 2 certification quickly and effortlessly.
