A SOC Audit typically refers to a SOC 2 assessment, which evaluates an organization's policies, procedures, and technical controls to ensure data protection. The term SOC stands for "System and Organization Controls" (previously Service Organization Controls) and represents an audit framework created and overseen by the American Institute of Certified Public Accountants (AICPA).
Purpose and Importance
SOC audits assess controls that help ensure the security, availability, processing integrity, confidentiality, and privacy of customer data. These audits are particularly critical for:
- Data centers
- Payment processors
- Third-party service providers
- SaaS companies
- Cloud service providers
SOC audits give clients tangible proof that their information remains secure when entrusted to service organizations.
SOC 1 vs. SOC 2
SOC 1
SOC 1 evaluates internal controls over financial reporting (ICFR). This type of audit:
- Ensures financial processes and reporting accuracy
- Is designed for companies whose services impact client financial statements
- Focuses on controls relevant to financial audits
- Is commonly required for payroll processors, payment processors, and similar services
SOC 2
SOC 2 focuses on data security and technology controls aligned with AICPA's Trust Services Criteria. This type comes in two forms:
Type 1
- Point-in-time assessment of control design
- Evaluates whether controls are suitably designed
- Provides a snapshot of the organization's security posture
- Faster to complete than Type 2
Type 2
- Comprehensive 6-12 month evaluation
- Verifies consistent operational effectiveness over time
- Tests that controls are operating as designed
- Provides stronger assurance to customers and stakeholders
SOC 2 Trust Service Categories
Organizations undergoing SOC 2 evaluation address five Trust Service Categories:
1. Security (Required)
Protection against unauthorized access to systems and data. This is the only required category and covers:
- Access controls
- Network security
- System monitoring
- Incident response
2. Availability
System accessibility and reliability as committed or agreed upon. This includes:
- System uptime monitoring
- Disaster recovery planning
- Business continuity procedures
- Performance monitoring
3. Processing Integrity
Complete, accurate, and timely processing of data. This ensures:
- Data is processed as intended
- Errors are detected and corrected
- Processing is authorized and complete
4. Confidentiality
Protection of designated confidential information. This covers:
- Encryption of sensitive data
- Access restrictions
- Secure data disposal
- Non-disclosure agreements
5. Privacy
Proper handling of personal information collection, use, retention, disclosure, and disposal. This addresses:
- Privacy notices and consent
- Data subject rights
- Data retention policies
- Third-party data sharing
Preparing for a SOC Audit
Organizations should focus on:
Documentation
- Collect existing policies and procedures
- Document technical controls
- Gather compliance evidence
- Map controls to Trust Service Categories
Gap Analysis
- Identify missing or weak controls
- Assess current documentation quality
- Review technical configurations
- Evaluate employee training and awareness
Remediation
- Address identified gaps before the audit
- Implement missing controls
- Update policies and procedures
- Train staff on new processes
Key Takeaways
- SOC audits evaluate an organization's security controls and data protection practices
- SOC stands for "System and Organization Controls" and is overseen by AICPA
- SOC 1 focuses on financial reporting controls; SOC 2 focuses on data security
- SOC 2 Type 1 is a point-in-time assessment; Type 2 covers 6-12 months of operation
- Five Trust Service Categories: Security (required), Availability, Processing Integrity, Confidentiality, and Privacy
- Preparation includes documentation, gap analysis, and remediation before the audit