In 2024, the importance of SOC 2 compliance has reached new heights as businesses increasingly rely on third-party service providers to handle sensitive data. As a result, ensuring that your organization meets SOC 2 requirements is essential for building trust with clients and staying competitive. 

SOC 2, a standard for managing customer data based on five "trust service principles," is a critical certification for service organizations today. Whether you’re just beginning your SOC 2 journey or looking to streamline the process, understanding the latest trends and tools is key to success.

What is SOC 2?
SOC 2, which stands for System and Organization Controls 2, is a framework that assesses an organization’s controls related to security, availability, processing integrity, confidentiality and privacy of data. Unlike SOC 1, which focuses on financial reporting, SOC 2 is specifically designed for service organizations that store or process client data, making it particularly relevant for SaaS companies, cloud service providers and other technology firms.

What does it mean to be SOC 2 certified?
While technically SOC 2 is not a "certification" but an attestation, achieving SOC 2 compliance means that an independent auditor has evaluated your controls and verified that they meet the SOC 2 criteria. This attestation serves as a powerful signal to clients and partners that your organization takes data protection seriously and adheres to best practices in information security.

Understanding SOC 2 Type 1 vs. SOC 2 Type 2
SOC 2 reports come in two types: Type 1 and Type 2.

• SOC 2 Type 1: This report assesses the design of your security controls at a specific point in time. It demonstrates that your organization has the necessary controls in place, but it doesn’t confirm whether those controls are operating effectively over time.
• SOC 2 Type 2: This report evaluates the effectiveness of your security controls over a period, typically six months to a year. A SOC 2 Type 2 report is more comprehensive and provides greater assurance to clients that your controls are functioning as intended consistently.

For most organizations, especially those handling sensitive client data, a SOC 2 Type 2 report is often more desirable because it offers a deeper level of scrutiny and ongoing assurance.

Who needs to be SOC 2 compliant?
SOC 2 compliance is particularly relevant for service organizations that handle, store or process customer data. This includes SaaS providers, data centers, cloud computing companies and managed service providers. If your clients or partners require assurance that their data is being managed securely, SOC 2 compliance is likely a necessity.

The SOC 2 audit process
A SOC 2 audit involves a few key steps:

• Readiness assessment: before the full audit, your organization should conduct a readiness assessment to identify gaps in your current controls and address any deficiencies. This can be done in a platform like Vanta or Drata, or using AssuranceLab’s AI-powered audit product, Lexi.
• Audit engagement: during the audit, an independent CPA firm like AssuranceLab will evaluate your controls against the SOC 2 criteria. For a Type 2 report, this involves testing the controls over a period to assess how your controls operate over time.
• Report issuance: once the audit is complete, the auditor will issue a SOC 2 report detailing their findings. This report can then be shared with clients and stakeholders to demonstrate your compliance.

Leveraging compliance automation tools
Achieving SOC 2 compliance can be a complex and time-consuming process, but the right tools can make it significantly easier. Compliance automation platforms like Vanta and Drata are transforming how organizations approach SOC 2 audits by automating much of the evidence collection, monitoring and reporting processes. These platforms integrate with your existing systems, continuously monitor your controls, and alert you to any compliance issues in real time, reducing the manual workload and helping you maintain compliance with less effort.

At AssuranceLab, we also offer tools to streamline your SOC 2 journey. Our PolicyTree product simplifies policy creation by covering the key areas needed for SOC 2 and other global privacy regulations. Additionally, our AI-powered audit insights provide actionable intelligence throughout the audit process, helping you stay ahead of potential issues and ensuring a smoother path to compliance.

How long does a SOC 2 audit take?
The timeline for a SOC 2 audit can vary depending on the size and complexity of your organization, as well as whether you’re pursuing a Type 1 or Type 2 report. Generally, a SOC 2 Type 1 audit can take a few weeks to a couple of months, while a Type 2 audit, which requires monitoring over a period of time, typically takes six to twelve months. Using compliance automation tools can help speed up this process by ensuring that your controls are continuously monitored and that evidence is easily accessible.

How much does a SOC 2 audit cost?
The cost of a SOC 2 audit can vary widely based on factors such as the scope of the audit, the complexity of your systems, and the audit firm you choose. For smaller SaaS companies using compliance automation, costs typically range from $5,000 to $15,000 USD, while larger organizations and those not using automation, is usually over $30,000 USD and can get much larger depending on the scope and complexity. The investment in SOC 2 compliance often pays off by opening doors to new business opportunities and helping to build trust with clients.

Sharing your SOC 2 report
Once you’ve obtained your SOC 2 report, you can share it with current and prospective clients to demonstrate your commitment to data security. However, since the report contains detailed information about your security controls, it’s important to share it selectively and ensure that recipients understand the confidentiality of the report. Many organizations use non-disclosure agreements (NDAs) to protect the contents of their SOC 2 reports.

If you’re ready to take the next step towards SOC 2 or need guidance on the best tools or implementation paths, our team at AssuranceLab is here to help. Contact us today to learn how we can support your journey.