In 2022, How Do You Write a Complete SOC 2 Compliance Report?

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Ensuring data security is a significant challenge for many organizations. Yet, companies are under growing pressure to protect customer and business data. There are regulatory guidelines that can assign stiff penalties to non-complying companies. 

One leading example is the General Data Protection Regulation, which you may know as GDPR. It covers data handling and security for members of the European Union. 

Others are state or industry-specific ones such as the California Consumer Privacy Act (CCPA). For industry-specific, there is HIPAA or Health Insurance Portability and Accountability Act that governs the health insurance sector. 

While SOC2 is another data compliance measure. Our article will uncover what it is and share tips on how to write a complete report.

Understanding SOC 2 Compliance 

Companies must ensure that they have the right security controls around data. SOC 2 is an acronym that stands for Service Organization Control 2. It is a data compliance standard for companies or organizations that store client information on the cloud. The American Institute of CPAs (AICPA) developed it as an auditing procedure. 

Companies will conduct the necessary audits and compile a SOC 2 compliance report.The SOC 2 report provides assurance that your company has the necessary controls for the following five trust areas.  

• Data and system security against unauthorized access, disclosure, or damage. These include physical security measures, password policies, and network configurations. 
• Data availability for the fulfillment of work roles. The audit will also look at measures to ensure business continuity in case of a security breach. Such include data backup, disaster mitigation, and recovery. 
• Integrity around data processing, such as monitoring and quality assurance procedures. 
• Data confidentiality is in alignment with the controls the company has in place. The audit will look at network security, access controls, and data loss prevention. 
• Data privacy around the collection, use, retention, disclosure, and disposal of customer information. All these should be in accordance with the Privacy Management Framework. Before, it was the Generally Accepted Privacy Principles (GAPP). The company should also have its privacy policies in place.

SOC 2 is not very rigid in its requirements. The AICPA only provides general criteria of what organizations need to do. The company must prove that it has proper controls to mitigate risks during the audit. The auditors have the task of checking that such is adequate. If not, they can suggest areas that need improvement. 

SOC 1 Vs SOC 2 Reports

So, what is the difference between a SOC 1 and SOC 2 report? SOC 1 looks at controls by outsourced service organizations that may have relevance to the user company’s financial reporting. The service organization performs the audit to assure clients that they have the right internal controls. An independent CPA firm must attest to the same.

A SOC 2 report is your assurance to clients that you have the right controls in place. An external auditor performs the audit and issues the final report. 

How to Write a SOC 2 Compliance Report 

The right way to write a SOC 2 compliance report is to have a checklist. We will share a complete one below. 

1. Start By Outlining the Company Goals and Audit Framework 

This part entails answering one very specific question. What is your goal for the SOC compliance audit? The ideal scenario would be that it will help your organization somehow. 

But, the benefits of certification are many. Some companies will need a SOC 2 report before transacting with you. This is quite common when dealing with security departments.

Customers also need the assurance that the company takes data security seriously. A SOC 2 compliant report is enough proof that it is. 

1. Development a Framework

Once you have clarity on the goal, the next step is to develop a framework. Start by looking at the controls you have in place. Identify what may be missing and take appropriate steps to correct the situation. 

The framework should also highlight the time and resources that will go into the process. It should not interfere with the regular running of the company

Having a framework is the best way to establish whether you are ready for an audit.  

1. Outline the SOC Audit Scope of Work 

We spoke about the five areas that a SOC 2 audit will cover above. You can choose which area you want the auditors to concentrate on. A security audit is critical and most audits will cover this part.  

Outlining the scope of work goes back to your goals. Do you, for example, want to know if the control measures follow industry guidelines? In this case, the focus would be on compliance rather than privacy or data availability. The audit should focus on data integrity if you are running a financial institution. 

1. Choose the External Auditor 

External auditors carry out the SOC 2 compliance audit. An audit is the official inspection of the organization’s data security controls by an independent body, in this case, an external auditor. 

Choose an auditor you know and trust. They must, of course, have the relevant SOC auditing experience. 

The auditors must understand the compliance measures your company uses. Every organization has leeway to choose its compliance measures, as the AICPA has no rigid SOC 2 compliance requirements. The auditor should work within your compliance measures and audit accordingly. 

1. Pick the Right Report 

There are two SOC 2 audit reports. 

• Type 1 focuses on a specific time and design of security procedures or processes. 
• Type 2 looks at the long-term success of the security processes. The time could range anywhere from 3 months to a year. 

You should also have the following SOC 2 documentation for the audit: 

• System or service description 
• Management assertion and an opinion letter 
• Your choice of the trust service categories 
• Control tests and results. The auditor may look at data access privileges and how you implement them.
• Risk assessment, both present, and potential. Such include environmental, external, and insider threats. You must also show how you mitigate against such 
• Any other information that you feel will help with the audit.

1. Work at Improving the Security Controls 

The advantage of going through the steps above is that you can assess your readiness for SOC 2 audits. In outlining the goals and scope of work, you may uncover gaps. That would be the perfect time to take corrective measures to plug such. 

With a proper checklist, writing the SOC compliance report is simple. All you need to do is fill in the details for each action point. 

Final Thoughts 

SOC 2 compliance has many benefits for the organization. It shows that the company is adhering to industry regulations on data security. Noncompliance can result in security breaches and costly implications. The GDPR, for instance, can impose hefty fines if a company defies the rules.

SOC 2 compliance is also a great way to build customer loyalty. Customers want to know that the information they share is safe. 

Use our tips above when preparing for and writing the SOC 2 report.