Requirements: SOC 2
SOC stands for ‘System and Organisation Controls’. The SOC 2 framework applies to all services organisations which store data that wish to convey assurance. Its primary objective is to ensure the safety and privacy of your customer’s data. SOC 2 was developed by the American Institute of Certified Public Accountants and defined its principles for managing customer data on five “trust service principles”
A SOC 2 examination report provides your client with the detailed information and assurance they need on safety and privacy as a provider of services. Unlike other standards, SOC 2 reports are unique to each organisation and are broken down into Type I and Type II.
Outside auditors’ issue SOC 2 certification. They assess the extent to which an organisation has complied with one or more of the five trust principles based on the systems and processes in place.
SOC 2 is a set of standards established by the American Institute of Certified Public Accountants (AICPA) for evaluating and reporting on the internal controls of a service organisation related to security, availability, processing integrity, confidentiality, and privacy.
It is commonly used by organisations that provide cloud-based or other outsourced IT services. The goal of SOC 2 is to provide assurance to customers and stakeholders that the service organisation has appropriate controls in place to protect sensitive data and maintain the availability and integrity of its systems.
SOC 2 Type 1 is a report on the design and implementation of controls at a service organisation relevant to security, availability, processing integrity, confidentiality, or privacy. It is an examination report that provides assurance about the design and implementation of the service organisation's controls at a specific point in time.
The examination is performed by an independent auditor who is a member of the AICPA and is conducted in accordance with the AICPA's SOC 2 standard. The SOC 2 Type 1 report includes the auditor's opinion on the design and implementation of the controls. Still, it does not include testing of the operating effectiveness of the controls over a period of time. This type of report is intended to provide customers and stakeholders with an independent assessment of the service organisation's controls as they existed at a specific point in time, which can help them make informed decisions about using the service organisation's services.
A SOC 2 Type 2 report is an examination report that provides assurance about the effectiveness of a service organisation's controls over a period, typically six months. It is a report on the controls at a service organisation relevant to security, availability, processing integrity, confidentiality, and/or privacy.
The examination is performed by an independent auditor who is a member of the AICPA and is conducted in accordance with the AICPA's SOC 2 standard. A SOC 2 Type 2 report includes the auditor's opinion on the design and implementation of the controls and testing of the operating effectiveness over time. The report is intended to provide customers and stakeholders with an independent assessment of the service organisation's controls, which can help them make informed decisions about using the service organisation's services.
SOC 2+ is a term that is sometimes used to refer to an enhanced version of the SOC 2 report that includes additional assurance on the service organisation's compliance with other relevant regulations or standards, such as HIPAA, PCI-DSS or ISO27001.
SOC 2+ report is an examination report that provides assurance about the effectiveness of a service organisation's controls over a period, typically six months. In addition to SOC 2 criteria, it covers additional compliance requirements as well.
The SOC 2+ report is intended to provide customers and stakeholders with an independent assessment of the service organisation's controls, which can help them make informed decisions about using the service organisation's services. It is important to note that SOC 2+ is not an official AICPA term; it’s a term that some service providers use to indicate they have met multiple compliance standards.
SOC 2 Type 1 reports on the design of controls, while SOC 2 Type 2 reports on the operating effectiveness of those controls. SOC2 Type 1 is usually not accepted by business partners; therefore, for an organisation, the goal is to achieve SOC2 Type 2.
SOC 2+ is a version of the SOC 2 report that includes additional assurance on the service organisation’s compliance with other relevant regulations or standards, such as HIPAA, PCI-DSS or ISO 27001. In other words, it is an integrated management system.
An independent service auditor's report is a report prepared by an independent auditor that provides assurance about the design and implementation of the effectiveness of controls at a service organisation relevant to security, availability, processing integrity, confidentiality, and/or privacy. The report is intended for customers and stakeholders of the service organisation who are looking for assurance about the service organisation's controls and how they protect sensitive data and maintain the availability and integrity of its systems.
The independent service auditor's report in SOC 2 is a key part of the SOC 2 examination process. The independent auditor is a member of the AICPA, and the examination is conducted in accordance with the AICPA's SOC 2 standard. The auditor examines the service organisation's controls and procedures and then issues an opinion on whether the controls are suitably designed and implemented or whether they are operating effectively over time. The report includes the auditor's opinion and a description of the service organisation's controls and test results.
In a SOC 2 report, Management's Assertion is a statement made by the service organisation’s management that represents their responsibility for the design and implementation of the controls over the security, availability, processing integrity, confidentiality, and privacy of the system and the data it processes. The management's assertion is included in the SOC 2 report, and it is one of the key elements that provide assurance to the customers and stakeholders of the service organisation.
The management's assertion includes a statement of management's responsibility for the design and implementation of the controls, a description of the service organisation's control environment, and a statement of management's belief about the effectiveness of the controls. The management's assertion is an important part of the SOC 2 examination process as it represents the service organisation's commitment to maintaining appropriate controls and protecting the sensitive data it processes.
The independent service auditor will assess the management's assertion and evaluate whether the controls are suitably designed and implemented or whether they are operating effectively over a period of time, as well as evaluating the management's assertion, before issuing an opinion in the SOC 2 report.
The independent service auditor's report is intended to provide customers and stakeholders with an independent assessment of the service organisation's controls, which can help them make informed decisions about using the service organisation's services.
In a SOC 2 report, the System Description is a document that provides a detailed description of the service organisation's system, including the infrastructure, network, software and applications, data, and other relevant information. The system description is an important part of the SOC 2 examination process as it provides a clear understanding of the service organisation's system and the controls that are in place to protect the security, availability, processing integrity, confidentiality, and privacy of the system and the data it processes.
The system description typically includes information such as:
In a SOC 2 report, Trust Services Criteria (TSC) and Related Controls are the standards and controls that the service organisation must meet to provide assurance about the security, availability, processing integrity, confidentiality, and privacy of its system and the data it processes. The TSCs are the core set of requirements that the service organisation must meet to pass a SOC 2 examination.
SOC 2 reports are based on the AICPA's SOC 2 standard, which consists of five Trust Services Criteria (TSC) categories:
Each category is divided into several objectives and controls, and the service organisation is required to provide a detailed description of its controls, procedures, and test results to the auditor. The auditor then evaluates the controls and issues an opinion on whether they are suitably designed and implemented to meet the criteria.
There are several resources available for learning about SOC 2, including:
AICPA SOC 2 webpage: The American Institute of Certified Public Accountants (AICPA) provides a wealth of information about SOC 2 on its website, including the SOC 2 standard, guidance on performing a SOC 2 examination, and frequently asked questions.
There are several resources available for learning about SOC 2, including:
AICPA SOC 2 webpage: The American Institute of Certified Public Accountants (AICPA) provides a wealth of information about SOC 2 on its website, including the SOC 2 standard, guidance on performing a SOC 2 examination, and frequently asked questions.
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