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SOC 2 Compliance Checklist

In today’s service-based economy, many companies share access to critical business and customer information. Companies of all sizes outsource key business functions to various third-party service providers or leverage Software as a Service (SaaS) tools. 

In all these scenarios, customer data and other private information is often stored on third-party systems and needs to be strictly controlled and protected.

SOC 2 is a compliance framework that certifies that service providers have strict internal controls and sound practices for the handling of third-party customer information. 

SOC 2 was originally developed by the American Institute of Certified Public Accountants (AICPA). CPAs customarily have broad access to internal financial and customer information and organization controls, in addition to experience in how audits are performed. 

At its most fundamental level, SOC 2 is an auditing process, whereby a third-party auditor validates the internal controls and information security policies of the service provider seeking certification.

SOC 2 certification is voluntary and not a legal requirement. Nevertheless, any service provider or SaaS company that handles third-party customer information should consider getting SOC 2 certified. 

The benefit of SOC 2 is higher degrees of trust between a service provider and their customers. For many customers, SOC 2 compliance today is seen as a table stake item; customers simply will not work with a service provider or SaaS tool, unless the vendor is SOC 2 certified. 

As a result, there is a lot at stake for any service provider looking to win more customers and grow their revenues.

 

 

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SOC 2 Compliance Checklist: The 10 First Steps for Certification

Let’s explore the 10 first steps and most common criteria associated with pursuing a SOC 2 certification.

1. Select an IT Services Provider

Passing a SOC 2 audit is a challenging process. Companies need robust information security policies and internal controls, along with all the technology and processes required for consistent implementation and follow through. 

For many growing companies, working with an outside IT service provider (ITSP) or managed service provider (MSP) is a great way to build capacity and raise the bar on internal controls and cybersecurity maturity. 

A dedicated technology partner can help in the development of IT and cybersecurity policies, along with the ongoing use of technology tools, implementation and enforcement. 

Even if a company has an internal IT staff, working with an MSP in a co-managed fashion can help the organization tackle the various technology improvements and upgrades that are required to get SOC 2 certified.

2. Select a SOC 2 Audit Partner

Another key step in the process is to hire a SOC 2 auditor. An external auditor is useful when performing an initial readiness assessment and is vital for performing the actual audit and certification. 

Companies should seek out CPA firms with a dedicated SOC 2 auditing practice or more specialized firms that only perform compliance audits.

3. Decide on Type 1 or Type 2 Certification

A key consideration early on, is whether your organization needs a SOC 2 Type 1 or Type 2 certification

A Type 1 merely audits the existence and implementation of controls that meet the Trust Services Criteria at a single point in time. 

Type 2 certification sets the bar higher and audits for thorough implementation and follow through over a meaningful period of time, such as up to a year. 

Because execution and follow through are so important, most organizations first get their Type 1 certification and then a year later their Type 2 certification.

4. Perform a Readiness Assessment

The next step on the SOC 2 compliance checklist for most companies is an initial readiness assessment, which should be performed by a certified SOC 2 auditor. This process will identify all the current gaps in meeting the Trust Services Criteria while producing a SOC 2 report.

SOC 2 Type 2 compliance checklist

5. Develop a Plan of Action

Another key output of the readiness assessment is a Plan of Action. Simply put, the Plan of Action is a list of all the controls, policies, improvements, and changes that must be made to be ready for a successful audit and certification. 

This process will often take several quarters to achieve for most organizations. There are often big policy, process and technology gaps that companies need to fill.

6. Refine Policies

A big part of achieving SOC 2 compliance is having a robust set of written policies across a range of areas. 

For example, to minimally meet the Trust Service Criteria for Security, Availability, Confidentiality, Privacy, and Processing Integrity, a company will need an array of documented security controls and policies, including:

  • A password policy
  • An access control policy
  • A physical security policy
  • A data classification policy
  • An information security policy
  • And more

7. Make Necessary Technology Investments

Technology and automation are key in setting rigorous controls and achieving effective implementation. A company that is serious about compliance cannot be behind on technology investment. 

The Readiness Assessment discussed above will invariably expose areas where the company needs to make upgrades and new investments in hardware, software, and cloud services to raise the bar on information and cyber security. 

Remediation projects are common after an assessment to fill the gaps and make progress on the plan of action

8. Leverage Compliance Automation

After policies are in place and technology upgrade projects are complete, the next big concern is consistent follow through and enforcement. 

A SOC 2 Type 2 examination checks compliance over time. Obviously, management teams and employees generally need to be mindful of policy adherence and consistent enforcement of internal controls

Working with an MSP will leverage a process-driven approach to technology and cybersecurity and prevent backsliding or loosening of controls. Moreover, there are new compliance-oriented SaaS tools that help with ongoing compliance automation and real-time assessments. 

It is not uncommon for companies to make operational changes, without full knowledge of the compliance implications. Compliance automation tools can help create a compliance checklist for rapid remediation and course correction.

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9. Perform the SOC 2 Audit

Normally, companies will first get their SOC 2 Type 1 certification and then go for their Type 2 examination twelve months later when they reach a level of audit readiness

The full audit may take upwards of three months to complete. It is vital that robust logging or compliance automation tools are used throughout your organization’s journey. 

This will expedite the audit process and give plenty of data and proof for use in SOC audits and subsequent audit reports.

10. Repeat Annually

The final item on any SOC 2 compliance checklist is to revisit and repeat the SOC 2 audit process on a yearly basis. This is necessary because internal controls can weaken over time. 

The cybersecurity environment is continuously evolving as well, throwing new challenges at cybersecurity and compliance professionals. 

Therefore, it is wise to continuously examine and audit your organization’s level of compliance and rigor on an annual basis.

Develop a SOC 2 Compliance Checklist With Help From NENS

Now that you understand the requirements for obtaining SOC 2 compliance and how to prepare for an audit, it’s time to develop a SOC 2 compliance checklist of your own. If you need assistance with the process, the compliance experts at NENS are always ready to assist you.

At NENS, we help our most sophisticated clients achieve and maintain their SOC 2 compliance with readiness assessments and audit preparation. We look forward to engaging with companies looking to take their compliance and cybersecurity posture to the next level.

Whether you need a SOC Type 1 or SOC 2 Type 2 compliance checklist, our team can provide the guidance and support you need. For more information about SOC 2 certification and SOC audits, contact us today.