What Is a SOC 2 Readiness Assessment?

SOC 2 Readiness Assessment

A SOC 2 readiness assessment is an evaluation of a service provider’s ability to meet SOC 2 audit requirements. It includes reviewing your organization’s controls, policies, and information security practices to ensure that they align with the SOC 2 Trust Services Criteria (TSC). 

During the assessment, an auditor identifies gaps or vulnerabilities in your current data security processes.  These gaps can result in an unqualified opinion in your SOC examination or have vulnerabilities show up during the actual testing. 

Once the assessment is complete, your service auditor will issue a management letter that outlines the potential risks that have been identified. The letter also offers recommendations for remediation before the audit process (whether you plan to undergo a Type 1 or a Type 2 audit). 

SOC 2 Readiness Assessment vs. SOC 2 Self-Assessment

While both SOC 2 readiness assessments and SOC 2 self-assessments prepare your organization for a SOC 2 audit report, they differ in formality, execution, and cost. Here are more details:

1. Formality and Execution

A SOC 2 readiness assessment is a formal process led by an AICPA-credentialed external auditor. 

In contrast, a SOC 2 self-assessment is less formal and conducted internally. It is typically managed by in-house personnel with SOC 2 expertise.

2. Cost

Since a SOC 2 readiness assessment is a formal process that requires external expertise, it’s more expensive. 

A SOC 2 self-assessment, in contrast, has no direct financial cost. You pay with time and productivity, as your internal staff has to dedicate a significant period to perform the assessment. Where is the part about execution?

Who Is Allowed To Conduct a SOC 2 Readiness Assessment?

SOC 2 readiness assessments are conducted by certified public accounting firms. These firms have the necessary training to audit your security posture and ensure your organization meets SOC 2 requirements.

With a CPA firm, you get specialized knowledge and support to ensure your data protection processes align with the necessary standards for SOC 2 compliance. 

Reach out to The Pun Group today to get access to our decades of experience conducting SOC 2 readiness assessments. We are among the top 500 firms as recognized by INSIDE Public Accounting. We’ve also received a Best of Accounting Award for client satisfaction by ClearlyRated, which means you’ll get the best service possible.

What Does an Auditor Look for During a SOC 2 Readiness Assessment?

Auditors focus on critical elements like risk management, security controls, and documentation during a SOC 2 readiness assessment. This is to ensure that organizations are equipped to safeguard data and maintain trust with clients.

During a SOC 2 readiness assessment, your auditor will evaluate the following to ensure they align with the TSC: 

• Internal controls. Encryption protocols, firewall configurations, and any access controls you have in place to prevent unauthorized access to your systems
• Processes. These include processes related to onboarding new users, monitoring system activity, responding to security incidents, risk assessment, and change management
• Policies. Data retention, security awareness, and vendor management policies
• Documentation. This includes proper documentation of security practices, policies, and incident response plans
• Data privacy and confidentiality. This includes controls and policies that govern how sensitive data—such as personal customer data—is handled at your organization and how you manage physical access to it
• Employee training. Your auditor will evaluate whether your employees are properly trained and aware of the organization’s security policies
• Vendor management. If you work with third-party vendors, your auditor will your processes for selecting, monitoring, and maintaining security standards with them

When asked for the most common security gap found during a readiness assessment, The Pun Group’s Director of Advisory Services notes,

“One common gap that organizations often overlook during a SOC 2 readiness assessment is the lack of formalized policies and procedures. 

Many organizations assume their informal practices and workflows are sufficient, but auditors expect to see well-documented and approved policies that align with the SOC 2 trust service criteria (security, availability, confidentiality, processing integrity, and privacy).

Failing to formalize these procedures can lead to significant delays and added costs during the audit.”

Bernard Gallagher, The Pun Group’s Director of Advisory Services

Your auditor will review how your organization manages data, identify any vulnerabilities, and determine if your control environment provides enough protection for sensitive information. 

This way, you can find any gaps or issues before the formal audit, which gives you a chance to fix them and ensure you’re fully prepared for a successful SOC 2 audit and both types of SOC 2 reports.

Steps for a SOC 2 Readiness Assessment

The most important step of a SOC 2 readiness assessment is reaching out to an experienced and qualified auditor. They will help you plan the assessment, gather evidence analyze it, and prepare a report for you.

1. Hire an Auditor and Understand SOC 2 Requirements

The first step is to work with an auditor from The Pun Group. SOC 2 readiness assessment is a formal, technical process that must be carried out by an AICPA-accredited auditor. This means you can’t use your in-house team for the assessment.

After you hire an auditor, they will help you understand SOC 2 compliance requirements. They’ll also help you decide which systems and services to focus on and which SOC 2 Trust Services Principles apply to your organization. 

You also want to sit with the auditor to set clear project milestones and timelines. This process will take two to five days. 

2. Gather Documentation To Provide to Your Auditor

In the next step, your auditor will ask you for evidence that supports your current controls and processes, especially in the areas you’ve decided to focus on. This phase depends on how quickly you want to move forward. 

During this period, you’ll collect and submit the requested documentation, and you’ll have the opportunity to ask questions about how this evidence will be evaluated.

3. Wait for Testing Fieldwork and Gap Analysis

Once the evidence has been collected, your auditor will conduct walkthroughs to understand your organization’s specific environment. They’ll look over the documentation you provided and compare your controls to the SOC 2 TSC. 

If they find any gaps, they’ll bring them to your attention and may request more information or clarification to get a complete picture of your processes.

4. Receive the Report and Close the Identified Gaps

In the final step, your auditor will provide a report that mentions any gaps found and the criteria they relate to. This will help you understand what areas need improvement before moving on to the actual SOC 2 audit. 

The next stage is to work on closing the identified gaps so you can be ready for an actual SOC 2 audit. This is an important stage of the compliance process. If you need support with implementing your remediation plan and best practices, you can ask your auditor for help and ensure a successful audit down the line.

When Should You Conduct a SOC 2 Readiness Assessment?

It’s best to start your SOC 2 readiness assessment 12 to 18 months before you need the final SOC 2 report. Starting the assessment early gives you a good period of time to identify and fix any issues before the formal audit begins.

If there are gaps in your controls or exceptions during the audit, it could negatively impact the outcome, and your clients may lose confidence in your security practices.  

In addition, you want to conduct a readiness assessment every time you renew your SOC 2 attestation to ensure your controls have not deteriorated.

How Much Does a SOC 2 Readiness Assessment Cost?

A SOC 2 readiness assessment costs anywhere between $10,000 and $17,000, depending on the scope of your audit, the size of your organization, and the auditor you choose. 

This covers your auditor’s time spent reviewing existing controls, systems, and business processes, as well as providing you with a detailed plan to address any gaps before the official audit.

Get SOC 2 Audit-Ready With The Pun Group

A SOC 2 readiness assessment helps you find and fix gaps in your policies, processes, and controls before the formal audit. Although it requires time, money, and external expertise, the process increases your chances of a successful SOC 2 audit.

At The Pun Group, we work closely with you to find gaps in your security practices and help you with risk mitigation. Our CPAs have over a decade of experience analyzing security measures across industries like healthcare, manufacturing, government, and nonprofits. We understand the challenges your business might run into and can provide effective solutions to find success with your SOC audit.

If you’re looking for hands-on support with audit readiness, The Pun Group can walk you through the entire SOC 2 readiness assessment. 

Reach out to learn more!