SOC 2 Requirements Simplified: What They Mean for Your Business

What Are SOC 2 Requirements?

SOC 2 compliance requirements provide a risk-based approach to developing data security controls and practices that align with your organization’s needs. 

To achieve SOC 2 attestation, your company must meet defined criteria and undergo an audit by an independent third party. Given the broad nature of SOC 2 criteria set by the American Institute of CPAs, implementing security controls will vary from one organization to another. 

As you work toward the compliance program, you’ll design and implement security measures tailored to your business while ensuring they meet the required standards. 

1. Trust Services Criteria

The Trust Service Criteria are the benchmarks used in SOC 2 audits to evaluate whether an organization has properly designed and implemented controls for security, availability, processing integrity, confidentiality, and privacy controls. These criteria were previously known as the Trust Services Principles.

When service providers want to ensure their data is safe with your organization, they’ll usually focus on how well you meet the security criteria of SOC 2. It’s worth noting that the security principle is the only mandatory requirement in a SOC 2 audit. 

Security – this category is mandatory; the others are voluntary

The security criterion is the core of SOC 2 and is mandatory, while the other categories are optional. With over 30 controls, the security criteria are designed to protect your organization’s and your customers’ data from unauthorized access.

Your auditor will typically examine technical measures like two-factor authentication system processing and web application firewalls. However, they’ll also consider factors that indirectly impact security, such as policies regarding hiring for security-related roles.

SOC 2 requirements for Security include:

• CC1.0: Control environment. This includes setting up leadership roles, recruiting the right talent, and providing necessary staff training.
• CC2.0: Data management. This involves how data is collected, utilized, and shared across the organization.
• CC3.0: Risk assessment. This generally focuses on evaluating financial and technical risks.
• CC4.0: Compliance monitoring. This includes the organization’s processes for internal evaluation and reporting.
• CC5.0: Compliance execution. This ensures that compliance measures are properly adopted throughout the organization and its technology infrastructure.
• CC6.0: Compliance and security integration. This addresses how data access, handling, and deletion are managed.
• CC7.0: Systems and operational controls. This focuses on the company’s incident response capabilities.
• CC8.0: Change management. This includes having processes in place to handle organizational and policy changes.
• CC9.0: Risk Mitigation. This includes managing internal risks as well as those from vendors and partners.

Availability 

This principle ensures that your systems and data are consistently accessible and operational, aligning with SOC 2 objectives. Under this, it safeguards data accessibility and establishes robust recovery mechanisms for a technical failure or data breach.

SOC 2 requirements

• A1.1: Technical capabilities. This involves making sure the company keeps a close eye on its processing capabilities and can scale up when needed.
• A1.2: Recovery from disruption. This looks at whether the company has the right backup and contingency plans in place to handle cloud service interruptions.
• A1.3: Testing recovery protocols. This ensures that the company’s disaster recovery plans are practical and work well in real-world scenarios

Privacy

The Privacy principle makes sure that personal information is collected, used, and protected in compliance with applicable privacy laws and regulations. It safeguards individual data and managing it responsibly throughout its lifecycle in the audit readiness stage.

SOC 2 Requirements include:

• P1.0: Notifying about data privacy objectives. This helps clients understand what’s happening with their personal data and the company’s intentions.
• P2.0: Communicating data choices. This requirement ensures that clients implement control over their personal information.
• P3.0: Collecting PII aligned with privacy goals. This ensures that the process of gathering PII aligns with the company’s stated privacy goals and security posture.
• P4.0: anaging PII usage and disposal. This requirement ensures that the handling of PII throughout its lifecycle meets privacy standards.
• P5.0: Access to review and update PII. This requirement ensures clients can manage their personal information effectively.
• P6.0: PII disclosure and breach notification. This covers crucial practices for communicating after a data compromise.
• P7.0: Keeping PII accurate and up-to-date. This requirement ensures the company has the right processes in place to keep PII quality high.
• P8.0: Responding to PII questions and issues. This includes the mechanisms in place for monitoring and enforcing PII-related concerns.

Processing Integrity

Processing Integrity makes sure your systems handle data correctly from start to finish. It means your data protection measures should be complete, valid, accurate, timely, and handled only by an authorized user entity. 

The goal here is to ensure your system performs without errors, delays, or unauthorized changes. Plus, it covers everything from the data entering the system to the output so that all processing remains accurate and reliable throughout. The SOC 2 requirements under this include:

• PI1.1: Understanding data processing goals. This sets actionable metrics and targets to guide your data performance.
• PI1.2: Ensuring input accuracy. This requirement is focused on maintaining high-quality input data.
• PI1.3: Maintaining data processing quality. This involves implementing the right policies and procedures to keep your data processing systems on track.
• PI1.4: Delivering high-quality data. This ensures that your data processing capabilities align with the business’s needs effectively.
• PI1.5: Adequate data storage. This requirement ensures that you have robust systems in place to store data inputs, information during processing, and outputs.

Confidentiality

Confidential information is a bit different from private information. While private info is personal and meant to be kept private, confidential information is valuable and needs to be shared with specific parties to be useful. 

This includes intellectual property, financial data, and other sensitive business details. The controls in this category ensure that only authorized individuals can access this type of data, keeping it secure and well-protected. The SOC 2 requirements under this include:

• C1.1: Handling confidential data. You must understand how well the organization identifies sensitive information and keeps it safe from unauthorized access.
• C1.2: Disposal of confidential data. These controls focus on ensuring that SaaS companies have proper procedures for securely disposing of information to prevent potential leaks.

2. Risk Assessment

Another important requirement for the SOC 2 audit report is the risk assessment, which involves understanding potential threats and their impact on your organization. It involves evaluating how likely these risks are and how severely they could affect your operations.

The Pun Group highlights key areas where assessments are usually stunted and offers valuable solutions for resolution,

“Organizations frequently come across typical weaknesses like insufficient documentation, insufficient access restrictions, and inadequate incident response strategy during the SOC 2 gap assessment phase. Organizations should create thorough documentation reflecting current policies and processes, put in place strong access control mechanisms with recurring evaluations, and create a formal incident response plan with testing on a regular basis in order to proactively address these concerns.”

Bernard Gallagher, The Pun Group, Director of Advisory Services

For SOC 2 compliance standard, you must conduct a thorough risk assessment to prepare for the audit. This audit process is overseen by a third-party auditor who assesses your controls against the relevant common criteria. Given the complexity and depth required, starting with an internal audit before the official external audit is a good idea.

During the external audit, the auditor will review your policies and procedures, interview staff, and check the effectiveness of your controls. 

3. SOC 2 Controls

SOC 2 controls are essentially the policies, processes, and systems that organizations put in place to meet the requirements of the SOC 2 Type 2 security framework.

Here’s a concise look at SOC 2 controls:

• Control environment. Build a foundation of integrity and ethical values, with active oversight from the board and senior management. Everyone should be accountable for maintaining these controls.
• Communication and information. Make sure the internal and external communications use high-quality information to support effective internal controls.
• Risk assessment. To prepare for possible challenges, identify and evaluate risks related to your entity’s objectives, including potential fraud.
• Monitoring activities. Set up the organization’s controls for ongoing evaluations to spot and address deficiencies and communicate these issues to the appropriate people.
• Control activities. Focus on activities and benefits of SOC that help manage risks with risk management and establish clear security policies and procedures.
• Logical and physical access controls. Protect customer information assets with security software and infrastructure, manage access based on roles, and prevent unauthorized or malicious software.
• System operations. Monitor changes for new vulnerabilities, respond to security incidents with a SOC 2 project plan, and regularly check for signs of malicious activity or errors.
• Change management. Ensure that any infrastructure, customer data, software, data centers, and procedures changes are properly authorized, tested, and implemented.
• Risk mitigation. Develop strategies to address risks from potential business disruptions.

4. Continuous Monitoring 

SOC 2 continuous monitoring involves continuously surveilling an organization’s systems and networks to identify potential security incidents or anomalies. This allows for easy compliance assurance and prompt issue resolution.

Without continuous monitoring, lapses, like problems in your onboarding information security program, can go unnoticed for weeks, potentially leading to compliance issues.

Gallagher points out that continuous monitoring is critical for maintaining compliance,

“By putting in place real-time alerts and notifications, any irregularities or non-compliant behavior may be quickly addressed, allowing for quick corrective action. Frequent evaluations and audits confirm these monitoring procedures’ efficacy and guarantee compliance with legal requirements. The prompt management and reporting of security incidents and breaches is ensured by the integration of continuous monitoring with incident response protocols.”

5. Change Management

SOC 2 change management sets up clear SOC 2 policies and procedures for handling updates to your IT environment. 

The main focus is on ensuring that any changes—whether they involve infrastructure, data, software, or procedures—are properly authorized, thoroughly tested, and officially approved, with compliance documentation. 

Essentially, you have to make sure every change is controlled and traceable, so you maintain security and compliance throughout the process.

6. Incident Response

SOC 2 emphasizes having a solid incident response plan in place. This involves clear communication about IT and security standards needs across your team. 

Your incident response plan should outline exactly what steps to take if there is a security breach or other issue, considering the SOC 2 audit cost. 

This ensures you can act quickly to minimize damage and get things back to normal as soon as possible.

Achieve SOC 2 Compliance with Expert Support from The Pun Group

As you can see from the SOC 2 requirements mentioned, achieving SOC 2 security compliance can be a complex and challenging process, especially for small to mid-sized organizations. 

The process involves thorough preparation, detailed SOC 2 compliance documentation, and continuous monitoring, which can be overwhelming. That’s where The Pun Group steps in.

We offer specialized compliance audit and assurance services designed to simplify your path to SOC 2 compliance. 

Our approach is tailored to fit the unique needs of each client, ensuring that you effectively implement and adhere to SOC 2 type 2 audit controls and requirements. We work closely with you to refine your processes, establish required controls, and prepare thoroughly before your SOC audits.

Our team provides dedicated support throughout the entire process, from the initial SOC 2 readiness assessment to the final preparation. If you’re looking for expert guidance and a streamlined approach to achieving SOC 2 compliance, get in touch with us. We’re here to help you succeed.