Maximizing the Benefits of Your SOC 2 Audit

Originally published by CAS Assurance.

What is the purpose of SOC 2 audit?

System and Organization Controls (SOC 2) audit focuses on the controls at a Service Organization relevant to the Security, Availability, Processing Integrity, Confidentiality, and Privacy of both the system and information the Service Organization uses in the course of delivering services to its user entities. The primary purpose of the audit is to provide an independent third party evaluation of the entity’s description of its system, design adequacy (suitability) of related controls, and operating effectiveness (type 2 report) of those controls. Thereby providing a reasonable level of assurance in the fairness of what is contained in the report to the various stakeholders of the Service Organization (including current and potential user entities, regulators, etc.).

What are the scopes of the two types of SOC 2 audit report?

There are two types of SOC 2 audit report – type 1 and type 2. In a type 1 audit, the focus is on the fair presentation of a Service Organization’s description of its system, including the related controls relevant to the Trust Services Criteria (TSC) in scope of the audit, and the suitability of the design of those controls to meet the objectives of the TSC. The audit scope could cover one, more, or all the five Trust Services Categories (i.e., Security, Availability, Processing Integrity, Confidentiality, and Privacy), depending on the need of the Service Organization.

The criteria in the Security category are often called the Common Criteria (CC). As a result, whenever the scope of a SOC 2 audit covers any or all of the other four categories, the Security category must be included in the scope. However, if the goal of the audit is focused on just the Security category, it is not required to include any of the remaining four categories in the scope.

In a SOC 2 type 2 audit report, the auditor examines and reports on the fair presentation of a Service Organization’s description of its system and related controls, suitability of the design of those controls to meet the relevant TSC objectives, and the operating effectiveness of the controls over a period of time covered by the audit (usually between 6 and 12 months). Unlike the type 2 report that covers a period of time, type 1 is a point-in-time report (e.g., as of June 30, 20XX).

What are the benefits of SOC 2 audit?

Let us answer this question by focusing separately on the two major categories of stakeholders in a SOC 2 audit – external stakeholders (including prospective and current user entities, regulators, business associates, and investors of the Service Organization); and internal stakeholders (the Service Organization’s management and their workforce)

Benefits to external stakeholders

The benefits of SOC 2 audit to external stakeholders include:

• Better Assurance: An unqualified SOC 2 audit report provides reasonable assurance to the external stakeholders that the Service Organization's controls are in place, suitably designed to achieve the relevant objectives (type 1), and operated effectively during the period covered (type 2).
• Cost Saving: Multiple user entities and their auditors can use the same SOC 2 audit report to perform their risk assessment of a Service Organization security posture, saving them the cost of sending their own separate auditors to audit the Service Organization’s system and controls.

Benefits to internal stakeholders

Benefits to internal stakeholders include, but are not limited to:

• Enhanced Security: The process of preparing for and achieving a SOC 2 attestation often involves the identification and closing of security gaps. This would invariably result in an improved overall security posture of the Service Organization. Further, because a SOC 2 attestation requires a repeat audit at least every 12 months, it necessitates continuous monitoring of security controls to ensure on-going effectiveness.
• Improved Reliability: The Service Organization earns better confidence of external stakeholders in its system and related controls for delivering its services.
• Cost Saving: The framework (AICPA 2017 Trust Services Criteria) for performing SOC 2 audit is mapped to many leading security standards and regulatory frameworks, including NIST-CSF, ISO27001/2, COBIT5, CIS, HIPAA, PCI-DSS). As a result, achieving SOC 2 attestation would, depending on the scope of the audit, facilitate a Service Organization’s compliance with multiple frameworks and standards.
• Market Differentiator: Achieving SOC 2 attestation demonstrates to current and prospective customers that the organization adheres to and values best practices related to security and privacy, which could serve as a great competitive advantage.

How do you maximize the benefits of your SOC 2 audit?

To maximize the benefits of SOC 2 audit, the audit project needs to be seen by the enterprise as a tool for enhancing security and compliance culture, promoting reliability and better results for the benefits of the organization and their external stakeholders. Therefore, the management must:

• Involve Stakeholders: It is important to involve relevant stakeholders across the organization to ensure that they own the objectives and result of the audit, as well as their related responsibilities for continued effectiveness of controls.
• Implement Recommended Improvement: In most cases, auditors would recommend some opportunities for improvement to the company’s management outside of the SOC 2 audit report. Implementing such recommended improvements would enhance the overall enterprise security and compliance posture.
• Monitor Controls Continued Effectiveness: Integrate control monitoring into the business processes and test control effectiveness on an on-going basis, not just for SOC 2 audit purposes but as best practice.
• Showcase Your Success: Achieving SOC 2 attestation is a big plus. Leverage the report as necessary to demonstrate your value for and investment in security to current and prospective customers.