What is SOC Compliance - SOC 2 overview
The Service Organization Controls 2, or SOC 2, is a set of compliance rules for businesses that store client data on the cloud. You are going to get an understanding of the fundamentals of SOC 2, including its distinction from SOC 1 and SOC 3, how it operates, the SOC's five trust principles, and a few recommended practices for SOC 2 compliance, by reading this article.
The explanation behind SOC 2
Both a technique and a set of criteria, SOC 2 (Systems and Organizations Controls 2) is an auditing standard. It is designed for technology-based businesses as well as third-party service providers that keep their clients' data in the cloud.
The SOC architecture that is used by the American Institute of CPAs includes both SOC 1 and SOC 2 as individual components (AICPA). Previously, firms were only required to comply with SOC 1, but since moving to cloud-based storage, they have now started targeting SOC 2.
First, second, and third-year Sociology
Comparing SOC 2 to SOC 1, what are the key differences? The ICFR is the main topic of SOC 1. (internal controls over financial reporting). On the other hand, SOC 2 places its primary emphasis on the manner in which data is handled in accordance with its five trust principles. (We'll go over these five trust concepts in more depth later on in this piece.)
There are two distinct report formats for the SOC 1 and SOC 2 audits. A Type I report examines the state of the controls and the results of the audit at a single instant in time, such as on a certain date. In the meanwhile, a Type II report covers the elements of a Type I report, in addition to describing the efficacy of the controls over a period of time, such as a full year.
You may anticipate that a SOC 2 report will include a significant amount of confidential data. As a result, a SOC 3 report is produced for distribution to the general public. Although it is a simplified and less technical form of a SOC 2 Type I or II report, it is nevertheless able to offer a high-level summary.
The Advantages of Using SOC 2
SOC 2 is now considered a "must-have" compliance for technology organizations and service providers as cloud storage continues to gain popularity as a location of choice for the archiving of data. However, SOC 2 entails more than just adhering to the five trust principles or obtaining certification. The primary focus should be on putting in place a trustworthy and protected system inside of your firm. SOC 2 is a fantastic tool for demonstrating to your clients that you are trustworthy and capable of managing their data in a responsible manner.
How the SOC 2 Exam Is Conducted SOC 2 Exam Preparation
Before pursuing SOC compliance, a corporation has to make sure it can fulfill the standards of SOC 2. Putting together a set of security rules and procedures is the first step. Everyone working for the organization must to adhere to the guidelines outlined in these written papers.
The Five Core Principles of Trust
The five trust principles are at the heart of the standards for SOC 2, and they must be represented in the policies and processes of the organization. Let's go through the five trust concepts that are outlined in SOC 2 and quickly define each one.
Protection against unauthorized access and loss of data is an essential component of the system's security. Firewalls, two-factor authentication (2FA) or multi-factor authentication (MFA), and intrusion detection are some examples of security measures.
Availability denotes that the system must at all times be accessible to users (or customers). In order for this to take place, there has to be a procedure in place to check whether or not the system fulfills its minimum acceptable performance requirements, as well as its requirements for addressing security incidents and recovering from disasters.
Integrity of processing means that the data are correct and that they are provided on time. The monitoring of the process and the guaranteeing of its quality are both covered by this trust premise.
Maintaining confidentiality requires careful handling of sensitive data such as personally identifiable information (PII), intellectual property (IP) material, and financial data. Encryption, restricting access restrictions to just a select few individuals, and using firewalls are some methods that may be used to ensure secrecy.
Regarding privacy, information must be handled in accordance with the company's data policy and the Generally Accepted Privacy Principles established by the AICPA (GAPP). Make use of two-factor authentication, encryption, and appropriate access restrictions.
Companies do not need to address all five of the items listed above, in contrast to PCI DSS and other compliance rules. As long as the trust principle applies to them, they are free to choose any one, a few, or all of these SOC 2 trust principles.
Audit of SOC 2
Now that there are rules and processes in place at the organization, it is possible to conduct an audit. Who is able to conduct an audit for SOC 2 certification? These kind of audits can only be carried out by third-party auditors who have received certification. An auditor's job is to make sure that a firm conforms with SOC 2 principles and is following its established policies and procedures. This is the duty that an auditor plays. The audit, on the other hand, is not carried out only once. In order for businesses to keep their SOC 2 certification, they are required to go through frequent audits (typically once a year).
Standard Operating Procedures for SOC 2 Compliance
The following is a list of some of the best practices that businesses may use in order to maintain continuous SOC 2 compliance:
Alarms: Set up a system that will notify individuals if there is a breach in cybersecurity. You should only have these alerts go off in the event that the cloud breaks away from its typical pattern.
Monitoring requires that you establish a baseline in order to prevent erroneous positive alarms from being triggered. In order to build this baseline, you need have a system in place that regularly monitors for activity that seem to be suspicious.
Urgent action is required in response. Putting the necessary remedial steps into effect. In this situation, having detailed audit trails would come in helpful for investigating incidents and responding to them.
In the end, having a SOC 2 certification does not always mean that a corporation that has been recognized is now safe from all types of cybersecurity risks. As a result, businesses have a need to adhere rigidly to both their internal rules and procedures and the best practices currently prevalent in their respective industries.