SOC 2 Readiness — How to Prepare for Your First SOC 2 Audit
How to Prepare for a SOC 2 Audit
Preparing for a SOC 2 audit is a critical step for any organization that processes, stores, or transmits customer data. The main benefit of achieving SOC 2 compliance is that it demonstrates your commitment to data security and can significantly enhance your credibility with customers and partners. As someone with experience conducting SOC 2 Audits firsthand, the biggest hurdle that I’ve found is bridging the gap in understanding regarding the importance and key factors in every step of the audit process. Here’s a comprehensive guide on how to prepare for a SOC 2 audit.
1. Understand SOC 2 and Its Importance
What is SOC 2? (this implies the existence of SOC 1, right? Correct! There’s also a SOC 3, but for the purpose of this article, we’re sticking to SOC 2)
SOC 2 is a framework that evaluates the effectiveness of an organization’s controls related to security, availability, processing integrity, confidentiality, and privacy. These are known as the 5 Trust Services Criteria (TSC). Each of these criteria have their own list of controls where testing of design and effectiveness is conducted, along with sampling and taking evidence from the organization to ‘attest’ that these controls are designed properly, work effectively, and most importantly — are vetted by a third-party as proof.
Why is SOC 2 Important?
SOC 2 compliance is essential for building trust with customers and partners. It provides assurance that your organization is capable of protecting sensitive data, which is crucial for business growth and maintaining a competitive edge. Although it is not a requirement by law, it certainly does give credibility to your company on a high level.
2. Select Your SOC 2 Report Type
There are two types of SOC 2 reports:
Type 1: Assesses the design of controls at a specific point in time. Here we take a look at what tools, processes, policies, and protections you have in place.
Type 2: Evaluates the operational effectiveness of controls over a period of time (typically 3 to 12 months). Here we test to make sure things work and aren’t breaking (to a certain extent).
Type 2 reports are generally preferred by customers as they provide a more comprehensive evaluation of your controls in action. What good is a design if it is doesn’t actually work?
3. Define the Scope and Objectives
Determine the scope of your SOC 2 audit by identifying which systems, processes, and departments will be included. This involves:
Infrastructure: Physical and virtual systems.
Data: Types of data processed and stored.
People: Roles and responsibilities.
Policies: Risk management and operational policies.
Clearly define the objectives based on customer requirements and service commitments outlined in contracts or service level agreements (SLAs).
4. Conduct a Readiness Assessment
A SOC 2 readiness assessment helps identify gaps in your current controls and processes. This step involves:
Reviewing existing controls against the SOC 2 criteria.
Identifying areas that need improvement.
Developing a remediation plan to address any gaps.
This assessment can be conducted internally or with the help of a consultant.
5. Develop and Implement Policies and Procedures
Establish comprehensive policies and procedures that align with the SOC 2 criteria. Key policies include:
Information Security Policy
Access Control Policy
Password Policy
Change Management Policy
Risk Assessment and Mitigation Policy
Incident Response Policy
Logging and Monitoring Policy
Vendor Management Policy
Data Classification Policy
Acceptable Use Policy
Information, Software, and System Policy
Business Continuity and Disaster Recovery Policy
Ensure these policies are documented, communicated to relevant stakeholders, and regularly updated.
6. Implement Technical Controls
Set up technical controls to protect your systems and data. This includes:
Access Controls: Implement role-based access and multi-factor authentication.
Encryption: Encrypt data at rest and in transit.
Monitoring and Logging: Continuously monitor systems and maintain logs for auditing purposes.
Incident Response: Develop and test an incident response plan.
These controls should be aligned with your policies and regularly tested for effectiveness.
7. Gather Documentation and Evidence
Collect and organize documentation that demonstrates the effectiveness of your controls. This includes:
Policies and procedures
System configurations
Access logs
Incident response records
Audit trails
Using compliance automation software can streamline this process by automating evidence collection and maintaining a centralized repository for documentation. Some software can include Drata, Vanta, SecureFrame, AuditBoard, and OneTrust to name a few.
8. Schedule the Audit with a Reputable CPA Firm
Choose a licensed CPA firm experienced in SOC 2 audits. Ensure they understand your industry and can provide both the readiness assessment and the final audit. A firm that offers compliance automation software can further simplify the process.
9. Conduct the Audit
During the audit, the external auditors will:
Review your documentation and evidence. This might come in the form of screenshots/screen captures, actual files, and live walkthroughs either virtually or on-site depending on the scope and accessibility.
Conduct interviews with key personnel. This is crucial to prepare for as you don’t want meetings without the necessary stakeholders present. That would be a huge waste of time for well, everyone.
Perform tests to evaluate the effectiveness of your controls. This may include showing the auditor how you perform processes live.
Be prepared to provide additional information or clarification as requested by the auditors.
10. Review and Address Audit Findings
Once the audit is complete, the auditors will provide a draft report. Review the findings and address any identified issues. The final report will include the auditor’s opinion on the effectiveness of your controls.
Conclusion
Remember — auditors are not out to get you, tell you you’re doing something wrong for the sake of knit-picking, and we are certainly not conducting personal attacks on your intellectual capabilities. Simply put, we’re looking at details to ensure that you know whether you’re adequately prepared to pass an audit through the use of stringent processes against well-known and working frameworks. No one’s perfect, and your systems certainly won’t pass 100% either. That’s okay. You don’t need an A+++ to pass an audit. However, you will receive either an unqualified or qualified opinion, meaning your designs are operating effectively — or not (respectively).
Preparing for a SOC 2 audit involves thorough planning, implementation of robust controls, and meticulous documentation. By following these steps, you can ensure a smooth audit process and achieve SOC 2 compliance, thereby enhancing your organization’s security posture and credibility. For more detailed guidance, consider consulting with audit experts (you may also contact me directly) or using compliance automation tools to streamline your preparation process. Audits aren’t always “fun”, but they certainly don’t have to be stressful. Now you’re prepared — good luck!
