They say knowledge is power, but at the moment, data and information seem to be more valuable. Hacks and data breaches have become a common feature in today’s world. Hackers have become bolder and relentless in their pursuit of data heist. This is why the American Institute of Certified Public Accountants came up with the SOC 2 certification.
The SOC 2 certification is awarded after a SOC 2 audit, which reviews your companies’ internal controls by evaluating the aspects of your system such as; security, privacy, processing integrity, confidentiality, and availability.
Achieving SOC 2 compliance will help your company in many ways, one of which is that customers and companies will trust you with their data. However, the SOC 2 compliance isn’t easy as you have to jump through hoops to get that certification. The questions answered below will help you ease the process.
- What Are Your Goals?
Your clients and customers trust you with their data, and if they feel that their information is insecure, they will probably take their business elsewhere. Therefore, to maintain their trust, you have to assure them of privacy and confidentiality.
As such, you can choose the pillars that you want to focus on. For example, you can select security, and the SOC 2 audit will focus on whether your systems are protected from unauthorized access.
You can also opt for confidentiality and privacy. The former reviews whether you protect your clients’ information while the latter focuses on the collection and disclosure of customers’ data.
- How Do You Prepare for SOC 2 Audits?
Begin by narrowing down on the specific systems you need audited. You can earmark systems with sensitive data for the audit. As previously mentioned, you need to set your goals and priorities for the audit. Also, decide on the extent of the audit as well as the locations you want to be audited.
You can also perform a pre-audit gap analysis and compare the findings with the SOC 2 requirements. Once you’ve identified the extent of the gap, you can dedicate resources to remediate the identified issues.
- Are SOC 2 Reports Necessary?
If your company or business deals with financial information of clients, then you need a SOC 2 report. The same applies to companies that outsource data storage, especially financial information. Also, remember that SOC 2 audits are not limited to financial reporting. You can commission an audit that scrutinizes your company’s internal controls in areas such as security, privacy, confidentiality, or processing integrity.
A SOC 2 report will help build the trust between your clients and your company. Clients prefer working with companies/businesses that they can trust with their financial information.
- Who is Licensed to Perform SOC 2 Audits?
SOC 2 audits are typically performed by accountancy organizations or independent Certified Public Accountants. SOC 2 auditors are governed by the AICPA- a professional organization that sets the standards and guidelines to be followed. The AICPA was established in 1887 and currently has over 431,000 members.
- What is the Cost of A SOC 2 Audit?
While there is no one-size-fits-all method of conducting a SOC 2 audit, the cost of the audit is often hefty. The report will focus on three components, which are readiness, internal cost of compliance, and SOC audit fees.
During a readiness assessment, your company will incur losses in lost productivity. It takes two weeks to conduct a readiness assessment, during which you will dedicate a team to conduct the preliminary investigations and prep work. That is two weeks of lost productivity.
To determine the cost of compliance, your legal team will review all agreements and contracts. This will set the foundation for policies regarding security, confidentiality, and privacy. It takes about 2-12 weeks and cost $10,000.
SOC audit fees will vary depending on:
- Size of your company
- Locations
- Nature of control objectives
- Control environment maturity
- Complexity of business services
- Timing of the audit
Once the audit is complete, your company might require new tools to monitor file integrity, manage security, and vulnerability. Depending on your budget, you can decide to either build or buy the tools. Additionally, you will incur staff training costs, especially when rolling out new security measures.
Every company that deals with customer data and financial information needs a SOC 2 audit. Although your clients don’t need to know all the sensitive information contained in SOC 2 reports, they at least need guarantees that their information is safe. Conducting SOC 2 audits regularly will help cement the trust and improve your reputation.
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