SOC 2 Readiness Assessments: Definition and Getting Started

Is your organization ready for a SOC 2 audit? Learn how to get ready for your audit by conducting a SOC 2 readiness assessment.

What is a SOC 2 audit?

The Service Organization Controls (SOC) audit is a standard issued by the American Institute of Certified Public Accountants (AICPA). The report provides an auditor’s attestation about the design and effectiveness of an organization’s controls.

Several categories of SOC audits exist:

• ​SOC 1: Covers the internal controls that govern an organization’s financial reporting.
• ​SOC 2: Reviews the internal controls that address various elements of an organization’s data security.

SOC 2 audits come in two types:

• ​SOC 2 Type I: Assesses whether data security controls are designed properly at a certain point in time.
• ​SOC 2 Type II: Assesses whether those controls are also effective over a period of time (e.g., six months or a full year).

A SOC 2 audit aims to assure your customers and stakeholders that your business complies with data security standards and that they can entrust their confidential data to you.

Depending on your organization’s needs, your SOC 2 report will encompass one to five trust services principles (TSP):

• ​Security (mandatory)
• ​Availability
• ​Processing integrity
• ​Confidentiality
• ​Privacy

Your organization isn’t required to address all five TSPs; only the security principle is mandatory. The other principles should only be included if relevant to your operations.

Obtaining a SOC 2 report is not a one-time event. It requires ongoing commitment from management to implement and test controls consistently, as well as a financial commitment to hire a service auditor to perform testing and issue an annual report.

SOC 2 compliance often requires shifting your organization toward a more formal framework of controls and testing. Executing your controls consistently is crucial, and significant remediation may be needed before your organization is ready for a service auditor’s testing.

SOC 2 audits are expensive, so your organization should prepare in advance. To avoid lost time and money, it’s best to conduct your own SOC 2 readiness assessment before submitting to a formal SOC 2 audit.

What is a SOC 2 readiness assessment?

A SOC 2 readiness assessment is essentially a dress rehearsal for your formal SOC 2 audit. Preparing your organization for an audit is critical to anticipate potential problems before an official SOC 2 audit that will cost you valuable resources.

Scope

The first step of a readiness assessment is determining the scope: the areas of your organization that may be included in the audit.

Scoping your SOC 2 audit may reveal that you need to include more of your firm’s systems and controls than you had envisioned. For this reason, it is best to prepare for your audit by including all five TSPs.

During the scoping phase, pay attention to the two types of SOC 2 reports. Many times, the Type I audit is a stepping stone to prepare for the more complicated Type II audit.

SOC 2 Type II is a standard auditing procedure for U.S. service providers. Any company that processes or stores customer and consumer information will benefit from conducting a SOC 2 Type II audit.

Assessment

After determining the scope of your SOC 2 report, evaluate your control environment using the SOC 2 criteria for TSPs most relevant to your organization’s operations.

A SOC 2 readiness self-assessment includes establishing the audit’s scope and examining whether the necessary controls have been designed and are operating effectively.

A readiness assessment may be conducted by your organization’s internal resources, a CPA firm, or a consulting company.

The assessment process should include the following steps:

1. 1.Mapping existing controls to the framework. Start with a review of control documentation that already exists and is relevant to the scope and control objectives identified in the SOC 2 standard.
2. 2.Documenting gaps and “future state” controls. Examine your existing processes to identify where gaps exist and avoid gaps in future controls.
3. 3.Identifying remediation plans. For every gap in the control environment, create a remediation plan that includes detailed steps and deliverables to satisfy the control standard, feasible and aggressive timelines, and a remediation team to track and motivate progress.

Remediation

Some gaps are easy to remediate, while others require more time and money.

Hold regular meetings for everyone involved in SOC 2 remediation activities. Gathering all relevant parties for input on remediation efforts helps perform a better gap analysis and fosters a culture of SOC 2 compliance throughout your organization.

Even after completing remediation, continue to conduct readiness testing to ensure the functionality of your organization’s controls.

Readiness testing

No matter how ready your organization appears, always conduct readiness testing before an official audit. Readiness testing will uncover human errors and identify controls that weren’t flagged as gaps during the assessment phase.

Why conduct a SOC 2 readiness assessment?

Conducting a SOC 2 assessment before identifying and remediating control failures puts you at risk of distributing a report that could raise compliance red flags with customers.

A readiness assessment helps your organization identify the procedures and processes you should have in place. It also helps prepare your organization to master the five TSPs and create a culture of SOC 2 compliance.

Devoting resources toward a readiness assessment ensures your SOC 2 audit starts on the right track and reduces the risk of wasting resources on an audit before control gaps have been remediated.

Tools to help manage your SOC 2 readiness assessment

Choosing the right SOC 2 compliance software can take the worry out of SOC 2 audit readiness.

A digital governance, risk, and compliance (GRC) tool like ZenGRC can help your organization prepare for SOC 2 by generating sample reports in advance of the official audit. When it’s time to hire an auditor, ZenGRC can provide audit information in an easy-to-use format.

ZenGRC features that make SOC 2 readiness easier include:

• ​Quick, easy deployment
• ​User-friendly design
• ​Easy internal audit capabilities
• ​Vendor management tools
• ​Continuous controls monitoring
• ​Integration with your software and services stack
• ​At-a-glance compliance dashboards that include your other frameworks

Start your journey to SOC 2 compliance the worry-free way with ZenGRC.