You have been in business for years. Now for the first time, you are being asked for your SOC 2 report by a current or potential customer. You are probably wondering what range of cost and effort is required, and if it is worth it. Don’t worry, you are not alone.It’s becoming increasingly common for organizations to request their vendors to undergo a Service Organization Control (SOC) 2 examination to ensure their sensitive information is being appropriately protected by your business. Many now require a report as part of their due diligence process before doing business with a company.

What is a SOC 2 Exam?

Developed by The American Institute of Certified Public Accountants (AICPA), a SOC 2 exam helps provide organizations a way to show the design and effectiveness of their internal controls. It is based on the AICPA’s trust services criteria of security required, availability, processing integrity, confidentiality and privacy. It applies to nearly all businesses collecting, storing, processing or sharing customer data.To complicate matters, there are two types of SOC 2 exams:Type 1: Evaluates an organization’s controls to determine if they are suitably designed and fairly stated at a single point in time.Type 2: Evaluates the same controls as a Type 1, but additionally examines how well those controls performed over a period of time, typically 6-12 months.

The Value It Brings

Aside from the fact your customers might be requiring you to provide a SOC 2 report in order to continue doing business with them, there are more benefits to having an exam completed.Having a SOC 2 report on hand and ready to go gives you the edge over competitors who can't show compliance. It demonstrates your commitment to data security and will help ensure confidential information is protected. Your team will also be able to answer control-related questions from customers more efficiently. It’s an effective way to assess and ensure compliance with a wide range of regulations and standards. Beyond that, it can help provide valuable insights into your organization’s risk and security posture.

Tips to Prepare

Achieving compliance serves as a powerful external measure of competency and credibility, enabling organizations to feel confident about using your services, but the process can be slightly stressful if you are not prepared. Here are five tips to ensure your readiness for a SOC 2 exam.

1. Get a readiness assessment. A readiness assessment can help you determine your preparedness for a SOC 2 exam. You can either choose to perform a readiness assessment on your own, or you may engage an auditing firm to perform your review. Such an assessment provides insight into your organization’s maturity level in its SOC 2 readiness journey and alerts you to any issues in advance. You are able to utilize auditors to help develop controls that can be audited and described properly.
2. Write your system description. If you have not already, you will need to get your system descriptions in order. First, determine which trust service criteria needs to be included in your SOC 2 exam based on your business. An overview of your systems’ controls to meet the SOC 2 control objectives will need to be compiled for the auditor. Depending on the complexity of your business, this could be a quick task or a daunting one. Make sure you give yourself enough time to complete this thoroughly. Almost all companies will typically engage their SOC auditor as a consultant to perform a readiness assessment, which will include assistance in preparing the system description. A key item to note is this document is focused on controls, not specific processes and does not need to give away all of your operational secrets.
3. Gather your documentation. Be prepared to produce documentation to your auditors when asked. You should have policies, procedures, organizational outlines and a listing of third-party vendors, among many other things, on-hand and readily available. In a SOC 2 exam, each control needs to be auditable. If it is not documented, it cannot be included in the exam.
4. Fix your issues. Take the time to address the control flaws and failures identified in the readiness assessment. It is also a good time to double check whether or not your scope is appropriate.
5. Line-up the right auditor. SOC 2 audits can only be performed by certified public accounting (CPA) firms. But keep in mind, not all accountants are CPAs, which is why you cannot hire a regular accountant to conduct your SOC 2 audit. It should be one that specializes in information security, like those at Doeren Mayhew, and must be independent from your organization. The earlier you pick the right partner, the smoother the overall process will go.

In a world where organizations are leveraging technology more than ever to deliver their products and services, security integrity is of the utmost importance to your customers. Although it may seem daunting, a SOC 2 exam can provide significant benefits to your business’s operations and bottom line.Doeren Mayhew can help from the onset of the process with our readiness assessment offering. We will help select the right SOC examination type to meet your organization’s objectives, while ensuring you have the right controls in place for your systems’ descriptions — so you can get your SOC 2 seal of approval. Contact our IT Advisory and Security Group today.