A Go-to Guide to SOC 2 Report

Srividhya Karthik

Srividhya Karthik

Sep 15, 2023

SOC 2 report

SOC 2 reports are an information goldmine and make an excellent resource for understanding how well organizations secure sensitive customer information. The reports, therefore, are often requested by customers and prospects to understand the robustness of an organization’s information security posture.

It can reduce deal friction, help organizations stand out amidst competition, and inspire confidence among customers and prospects. 

Here’s a quick lowdown on a SOC 2 report, what your customers will look for in it, and why you need it.

What is a SOC 2 Report?

Soc 2 report is an exhaustive description of your audit and testimony to the strength of your infosec practices. It captures your auditor’s detailed opinion on your internal controls’ design and operating effectiveness as per SOC 2 requirements.

Therefore, it allows your customers and your customers’ customers to assess and address the risks associated with their relationships with your company.

Why do companies need a SOC 2 report?

Well, your SOC 2 report is the only proof that you are SOC 2 compliant. A SOC 2 report can also be a great growth enabler.

Here are the nine reasons why you need a SOC 2 report:

Why SOC 2 Report

Customer Demand 

SOC 2 reports, though not compulsory, are increasingly seen as necessary to win enterprise deals.

Cost-Effective

SOC 2 may seem expensive, but the data protection standard it implements can help secure your information from breaches.

Competitive Edge

Improves your chances of landing a deal as SOC 2 makes you compare favorably over competitors who aren’t compliant.

Securing your Business 

It secures your operating environment and shows that your systems and networks are secure. 

Regulatory Journey

SOC 2 dovetails other compliance frameworks too. So it’s easier to get compliant with newer frameworks in future.

Best Practices 

It gives you deep insights into your internal controls, governance, security processes, infrastructure, practices and oversights.

Answer security questionnaires with ease

While you can’t eliminate the time you spend answering the security questionnaire, having a SOC 2 report makes the process easier, seamless and faster. Find the best SOC 2 Report examples here.

Types of SOC 2 reports

Based on the depth of evaluation and the monitoring period, the SOC 2 report comes in two types – SOC 2 Type 1 and SOC 2 Type 2.

SOC 2 Type 1 report reviews the design of an organization’s internal controls as per SOC 2 requirements at a point in time. It’s like a snapshot of the design of internal controls. So, to that extent, it is not very comprehensive and takes lesser time to obtain (relative to SOC 2 Type 2).

SOC 2 Type 2 report is detailed and comprehensive. It has an in-depth description of the design and operating effectiveness of the organization’s internal controls vis-a-vis framework requirements over a 3-12 months period.

Different Types of Soc 2 Reports

What does a SOC 2 report contain?

Apart from general information on the audited organizations, SOC 2 reports are sought after for the auditor’s opinion on their assessment of the organization’s controls. It also comprises a description of the tests involved and recommendations to improve data security protocols where needed.  You must select an AICPA-accredited CPA (firm or individual) to conduct your audit.

SOC 2 reports can run into many pages and include the following sections:

SOC 2 Report Sections

Section 1: Management Assertion

The section captures a summary of the organization’s services, products, applications, structures, systems and security controls and gets written by the audited organization. The management acknowledges that the information provided is accurate and relevant.

Section 2: Independent Service Auditor’s Report

This section comprises the much sought-after auditor’s opinion on the organization’s cyber security posture; it, however, doesn’t give details beyond that. 

An auditor’s opinion is divided into four types:

Unqualified – You pass with flying colors! 

The auditor’s unqualified opinion indicates that the auditor found no issues during the audit. All the controls tested were designed appropriately (Soc 2 Type 1 report) and operated effectively (Type 2 report).

Qualified – Close, but not quite

This means that some areas need attention. What is the worst thing about a qualified report? It depends on the failed controls and how they affect the report’s users.

Adverse – You failed 

An adverse opinion means the organization materially failed one or more standards, and its controls and system aren’t reliable.

Disclaimer of Opinion – No comments!

This isn’t really an opinion. Essentially, the auditor could not form an opinion based on the information provided. It occurs when auditors do not have access to the required information or cannot complete it neutrally.

Section 3: System Description

This section is a must-read and describes the system(s), scope & requirements, components, controls, and other systems information. Control activities (policies and procedures) get detailed in this section alongside information and communication systems, monitoring and risk assessments.

Section 4: Applicable Trust Services Criteria and Related Controls, Tests of Controls, and Results of Tests

This section summarizes all the tests and its results performed during the audit, which makes it a critical part of the report. The section provides insights into the auditor’s opinion described in section 2. 

SOC 2 Trust Service Criteria, formerly known as Trust Service Principle, comprise security, availability, confidentiality, privacy, and processing integrity. The first three sections in both SOC 2 Type 1 and SOC 2 Type 2 reports are similar, but this section differs significantly.

Type 1 report features a list of all the controls evaluated during the audit. Type 2 report will also present the auditor’s tests and the test results for each listed control. For a Type 2 report, this section will also highlight exceptions or deviations noted by the auditor.

Aside from the Trust Service Principles, the organization’s infrastructure, software, people, data and procedures also get audited.

SOC report differences

Section 5: Other information provided by the Management

This section is optional. It comprises management’s response to the variations highlighted by the auditor in the earlier section. The management gives more context and information around the exceptions, citing reasons for the deviations and proposing ways to ensure it doesn’t repeat.

How long does it take to prepare a SOC 2 report?

The time to obtain your SOC 2 report depends on several factors – the type of SOC 2 report, the route to SOC 2, and the complexity of your organization. If you use a DIY approach or rope in an external consultant to get your report, you must set aside 3-6 months for audit preparation alone.

Add to that the audit monitoring period of 3-12 months for SOC 2 Type 2, and the minimum time to procure a SOC 2 report is roughly six months! And that’s an optimistic bet. Type 1 takes lesser time in comparison.

When you work with compliance automation platforms like Sprinto, you can drastically cut down the time to get a report.

How much does SOC 2 report preparation cost?

The costs to prepare for the report depend on your organization’s size, the complexity of operations, and the type of auditor chosen. In addition to readiness assessments (optional) and other overheads, a SOC 2 report can set you back by about $20000-$50000. Again, these are just ballpark estimates.

Automating your compliance with Sprinto can bring down your costs considerably.

Also read: Guide to SOC 2 Type 2 certification

When to get your SOC 2 report renewed?

SOC 2 attestation is only valid for a year. So, you must undergo the audit again at the end of the year. And if there is a gap between the end of your earlier SOC 2 report period and the start of your following assessment, you can get a SOC 2 bridge letter.

Find out how Sprinto can help you get your SOC 2 report

SOC 2 audits can be exhaustive and come with multiple back-and-forths between the auditor and you. Sprinto’s compliance automation platform removes inefficiencies and automates repeatable tasks. As a result, you needn’t spend your time toggling between windows and buried in spreadsheets.

You get all analytics on your dashboard with a view of the gaps and what you must do to plug them based on the trust principles chosen. Audits are easy and frictionless using Sprinto. Your auditor gets a custom dashboard that lists all the pieces of evidence with relevant documentation in the format they need. 

Notwithstanding the type of SOC 2 report, Sprinto saves you hours of audit prep time and helps you invest your time where it matters most for your growth!

Support your infosec initiative with best-in-class automation. Talk to us today to get a lowdown on how Sprinto can help you get a SOC 2 report.

FAQs

Who needs a SOC 2 report?

SaaS firms, cloud service providers, and organizations that store customer information in the cloud need a SOC 2 report. A SOC 2 report proves that client data is secure and private. 

Who audits the SOC 2 report?

Your SOC 2 auditor is the one who prepares your report. The report is a detailed evaluation of your internal controls, tests, and results and comprises management assertion, and system description, among other things. 

Srividhya Karthik

Srividhya Karthik

Srividhya Karthik, is a Content Lead at Sprinto, she artfully transforms the complex world of compliance into accessible and intriguing reads. Srividhya has half a decade of experience under her belt in the compliance world across frameworks such as SOC 2, ISO 27001, GDPR and more. She is a formidable authority in the domain and guides readers with expertise and clarity.

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