Demystifying SOC 2: Answers to the Most Frequently Asked Questions

SOC 2 reports play a crucial role in evaluating the security, privacy, and integrity of sensitive information managed by service providers. For organizations seeking to entrust their data to reliable partners, understanding the fundamentals of SOC 2 is essential.

In this article, we will address the most commonly asked questions about SOC 2, providing you with a professional and reliable overview of this framework.

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What Are SOC Reports? 

SOC reports, previously known as Service Organization Control reports, are examinations conducted by CPAs to assess system-level controls at service organizations or entity-level controls at other organizations. These engagements follow the guidelines outlined in Statement on Standards for Attestation Engagements (SSAE) No. 18.

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What Were SSAE NO. 16 And SAS70? 

SSAE No. 16 superseded SAS 70 as the guiding framework for service auditors. Effective for reports ending on or after June 15, 2011, SSAE No. 16 replaced the initial requirements and guidance provided by SAS 70, also known as AU Section 324 Statement on Auditing Standards No. 70, which was introduced in the early 1990s.

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What Are The Trust Services Criteria And Categories? 

The Trust Services Criteria, developed by the Assurance Services Executive Committee (ASEC) of the American Institute of Certified Public Accountants (AICPA), consist of control criteria used to evaluate the effectiveness of controls related to information security, availability, processing integrity, confidentiality, and privacy. These criteria are categorized as follows:

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Security

Protection against unauthorized access, disclosure, and system damage that may compromise information or systems.

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Availability

Ensuring information and systems are operational and accessible to meet organizational objectives.

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Processing Integrity

Ensuring the accuracy, completeness, and validity of system processing.

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Confidentiality

Protection of designated confidential information.

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Privacy

Proper collection, usage, retention, disclosure, and disposal of personal information.

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The Trust Services Criteria were formerly referred to as “principles”. Aligned with the 17 principles of the 2013 COSO internal control framework, the Trust Services Criteria encompass additional criteria covering access controls, system operations, change management, and risk mitigation.

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What Are The Types Of SOC Reports?

There are various types of SOC reports, each serving specific purposes and addressing different areas of focus. The commonly encountered types include:

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• SOC 1: Reports on controls at service organizations impacting user entities' financial statements. It is a restricted use report.
• SOC 2: Reports on controls at service organizations relevant to security, availability, processing integrity, confidentiality, and privacy of systems used for data processing. It is a restricted use report.
• SOC 2+: SOC 2 report with additional subject matter or criteria within the examination scope, such as PCI, HIPAA, or HITRUST. It is a restricted use report.
• SOC for Service Organizations: SOC 2® HITRUST
• SOC for Service Organizations: SOC 2® CSA STAR Attestation
• SOC 3: Similar to SOC 2, but designed for general use without providing the auditor's tests and results. It is a general use report.
• SOC for Cybersecurity: Reports on the effectiveness of cybersecurity risk management programs. It is a general use report.
• SOC for Vendor Supply Chains (under development): A report assessing cybersecurity risk in supply chains.

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What Are The Contents Within A SOC 2 Report? 

A SOC 1 or SOC 2 report typically consists of the following sections:

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What Are The Types Of SOC 2 Reports? 

There are two main types of SOC 2 reports:

• SOC 2 Type I: Assesses the fairness of management's description of the service organization's system and the suitability of controls' design against the applicable trust services criteria as of a specific date (Point-in-Time).

• SOC 2 Type II: Assesses the fairness of management's description, along with the design and operating effectiveness of controls, throughout a specified period.

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What Is A Security Control? 

Security controls encompass safeguards and countermeasures implemented to mitigate security risks to physical property, information, computer systems, and other assets. These controls protect the confidentiality, integrity, and availability of information. In essence, security controls are preventive measures put in place to minimize unwanted events. 

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Wrapping Up

Understanding SOC 2 reports is vital for organizations looking to entrust their data to reliable service providers. With this comprehensive overview, you now have a professional and reliable understanding of SOC 2, enabling you to make informed decisions regarding the security, privacy, and integrity of your sensitive information.

Potential partners and vendors now expect businesses to prioritize security, especially with the escalating volume of sensitive data being handled even by small businesses and the increasing frequency and cost of data breaches. Moreover, as cloud usage becomes ubiquitous across industries, compliance frameworks such as SOC 2 and ISO 27001 are nearly obligatory. Startups can no longer adopt a laissez-faire approach, deferring compliance matters. Instead, compliance must be given top priority.

Drata is a cutting-edge security and compliance automation platform that maintains a constant watch over a company's security controls, while optimizing workflows to ensure preparedness for audits. With a comprehensive suite of over 16 purpose-built products and frameworks, Drata empowers businesses to achieve and sustain compliance more efficiently. Additionally, it provides business owners with real-time visibility into their security posture by automating control monitoring, offering centralized dashboards, and generating reports that seamlessly extract data from existing systems via over 75 integrations.