SOC 2 Compliance Checklist: 12 Essential Steps to Take

In 2023, data breaches cost companies an average of $4.45 million (IBM Report).

Can your business afford that hit? SOC 2 compliance helps you avoid such staggering losses.

This guide breaks down how you can achieve SOC 2 compliance efficiently, in a step-by-step checklist.

Let's get your business secured and trustworthy.

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What is SOC 2 Compliance?

SOC 2 Compliance is an auditing framework developed by the American Institute of Certified Public Accountants (AICPA).

It ensures service providers manage customer data securely to protect client interests.

The SOC 2 audit serves as a comprehensive evaluation of your data handling practices, verifying that you're safeguarding information effectively.

This framework evaluates a company's controls related to:

• Security: Protecting information and systems against unauthorized access.
• Availability: Ensuring systems are operational and accessible as agreed.
• Processing Integrity: Guaranteeing that system processing is complete, valid, accurate, and timely.
• Confidentiality: Protecting sensitive information from unauthorized disclosure.
• Privacy: Managing personal information in line with privacy policies and regulations.

There are two types of SOC 2 reports:

• Type I: Evaluates the design of controls at a specific point in time.
• Type II: Assesses both the design and operational effectiveness of controls over a period. AICPA SOC 2 Report

Independent auditors conduct SOC 2 examinations following the AICPA guidelines. They ensure that your controls meet the necessary Trust Services Criteria, providing an objective assessment of your data security practices.

Why Do You Need SOC 2 Compliance for Your Business?

SOC 2 compliance is a strategic necessity that can help your business in many ways:

1. Strengthen Customer Trust
   Protecting client data with robust security controls builds trust and fosters lasting relationships.
2. Unlock New Opportunities
   Many enterprises require SOC 2 compliance. Achieving it opens doors to lucrative contracts and new markets.
3. Demonstrate High-Security Standards
   Compliance signals your commitment to exceptional security and privacy, setting you apart in the market.
4. Meet Legal Requirements
   SOC 2 compliance aligns your business with the various laws and regulations, reducing legal risks.
5. Streamline Communications
   Compliance satisfies stakeholder concerns upfront, reducing time spent on security questionnaires.

The SOC 2 Compliance Checklist

Trying to secure that pivotal enterprise contract?

It often hinges on one critical milestone: achieving SOC 2 compliance.

We've crafted a step-by-step checklist to guide you smoothly through the compliance journey, saving you time and resources.

1. Determine Your Compliance Needs

Clarify Your Objectives

Why are you pursuing SOC 2 compliance?

• Customer Demands: Are clients requesting proof of robust security measures?
• Market Competitiveness: Do you need to match or exceed industry standards?
• Security Posture Strengthening: Is improving your internal controls a priority?

Pinpointing your "why" aligns your team and streamlines your efforts.

Define Your Compliance Scope

Specify what's included:

• Systems and Infrastructure: All technology handling sensitive data.
• Procedures: Operational processes when dealing with sensitive data.
• Personnel: Staff and vendors who have access to sensitive data.

Proper scoping avoids surprises during the audit. Collaborate with experts to ensure accuracy.

Select Relevant Trust Services Criteria

Next, choose the Trust Services Criteria (TSC) relevant to your operations:

• Security: Protects against unauthorized access. (Required)
• Availability: Ensures systems are operational when needed. (Optional)
• Processing Integrity: Guarantees accurate and timely data processing. (Optional)
• Confidentiality: Safeguards sensitive information. (Optional)
• Privacy: Protects personal data of individuals. (Optional)

Choosing the right criteria tailors your SOC 2 report to address stakeholder concerns directly.

For instance, if you're a SaaS provider handling client data, Security and Availability are essential.

Remember: If you exclude any criteria, be prepared to justify this to your auditor. Transparency maintains your report's credibility.

Choose Between Type I and Type II Reports

Decide which audit report suits your current needs:

• Type I Report: A snapshot of your controls at a specific point in time. Ideal for demonstrating initial compliance efforts quickly.
• Type II Report: An assessment over a period (typically six months), offering comprehensive assurance of control effectiveness.

If you need to showcase compliance swiftly to secure a deal, a Type I report might be your best bet. A Type I audit lays a solid foundation, making the transition to a Type II audit smoother when you're ready.

But if you're dealing with enterprise clients or partners who require long-term assurance, opt for a Type II Report.

2. Assemble Your Compliance Team

Build the Right Team

SOC 2 compliance isn't a solo endeavor. Assemble a team covering all crucial areas:

• Compliance Lead: Appoint a knowledgeable leader to manage readiness initiatives. Typically a CISO or CTO.
• IT Security Experts: To implement and manage technical controls.
• Legal Advisors: For interpreting regulatory requirements.
• HR Representatives: Overseeing access management and policy enforcement.

Diverse expertise ensures comprehensive coverage.

Collaboration Tips

• Engage Specialists: Bring in experts from various departments.
• Set Clear Goals: Define measurable objectives supported by leadership.
• Leverage Automation: Use compliance tools to streamline tasks.

Empower your team to take ownership. A motivated team drives productivity and success.

Implement SOC 2 Compliance Training

Equip your team with essential knowledge:

• Malware Detection: Ensure they can recognize and prevent threats.
• Incident Reporting: Establish clear protocols for security incidents.

Regular training keeps everyone aligned with the latest standards and best practices.

Avoid the "Check-the-Box" Mentality

SOC 2 compliance is more than ticking boxes.

Ironical, I know.

A checklist can never account for all elements regarding your organization's security.\
"Check-the-box" mentality leads to:

• Incomplete Measures: Overlooking critical but unspecified elements.
• False Security: Believing compliance equals absolute security without thorough evaluation.

So, what's the solution?

• Make security apart of your organization's culture.
• Incentivize people to take measures beyond minimal requirements.
• Foster a culture of continuous improvement.

3. Conduct Thorough Assessments

Perform a Self-Assessment

Audit yourself before the official audit:

• Identify Weaknesses Early: Address issues proactively.
• Save Time and Resources: Avoid last-minute scrambles.

Conduct an Internal Risk Assessment

Evaluate and document risks:

• Rate Risks: Based on likelihood and impact.
• Use Established Frameworks: Such as ISO 31000 and COSO, as recommended by the Institute of Internal Auditors.

Run a Readiness Assessment

Simulate the audit process:

• Internal Assessment: Use your team for evaluation.
• External Consultants: Hire experts for an objective view.

Prepare for various scenarios, including emergencies, to ensure comprehensive readiness.

4. Gap Analysis and Remediation

Conduct a Gap Analysis

Compare current practices with SOC 2 requirements:

• Highlight Deficiencies: Know exactly where improvements are needed.
• Develop a Remediation Plan: Outline steps to bridge gaps.

Close Identified Gaps

Take decisive action:

• Update Policies: Ensure documentation reflects compliant practices.
• Implement Controls: Enhance security measures where necessary.
• Train Employees: Update staff on new policies and procedures.

Create a Remediation Plan

Detail your approach:

• Scope: Define areas needing attention.
• Timeline: Set realistic deadlines.
• Resources: Allocate budget and personnel.
• Responsibilities: Assign tasks to team members.

5. Implement and Test Controls

Deploy Relevant Controls

Mitigate risks with appropriate controls:

• Preventative Controls: Stop incidents before they occur (e.g., firewalls).
• Detective Controls: Identify incidents in real-time (e.g., intrusion detection systems).
• Corrective Controls: Address and recover from incidents (e.g., backup systems).

Test Controls Thoroughly

Ensure controls are effective:

• Inquiry: Confirm processes with personnel.
• Observation: Witness controls in action.
• Examination: Review documentation and configurations.
• Re-Performance: Independently execute controls to verify results.

Regular testing ensures your security measures perform as intended.

6. Documentation and Communication

Communicate Internally

Keep all teams informed:

• Roles and Responsibilities: Ensure everyone knows their part.
• Process Updates: Share changes promptly.

Effective communication boosts productivity and fosters collaboration.

Inform Customers and Prospects

Build trust by updating stakeholders:

• Personalized Communication: Address specific client concerns.
• Consistent Messaging: Maintain uniformity across all channels.

Transparency reinforces your commitment to security.

7. Audit Preparation

Reassess Your Choices

Confirm that your earlier decisions still align with your objectives:

• Report Type: Type I or Type II—does it fit your current needs?
• Scope and Objectives: Adjust if your organization has evolved.
• Trust Services Criteria: Add or remove criteria as necessary.

Final Readiness Assessment

Conduct a last internal check to ensure full preparedness. Address any remaining issues proactively.

8. Budgeting and Cost Planning

Understand Typical Costs

Be aware of common expenses:

• Audit Costs:
  • Type I Audit: $10,000–$60,000
  • Type II Audit: $30,000–$100,000
• Additional Expenses:
  • Project Lead Salary: $50,000–$75,000 over six months
  • Legal Fees: Around $10,000
  • New Security Tools: $5,000–$50,000

Budget Strategically

• Plan for All Costs: Include both direct and indirect expenses.
• Consult Early: Engage with auditors and consultants to understand potential fees.

Reduce Costs Without Compromising Quality

• Automate Processes: Use compliance automation tools to lower manual workloads.
• Follow Best Practices: Adhering to established protocols can lead to significant savings.

But what if there was an even easier way to achieve compliance, saving you time and money?

Introducing EasyAudit.

• Slash Costs: Reduce your compliance expenses from up to $147,000 to under $30,000. No hidden fees — just transparent, flat-rate pricing.
• Accelerate the Process: Get audit-ready in 3-4 months instead of the usual 6-8 months.
• Customized Controls: Receive security controls tailored specifically to your business — not generic templates.
• Effortless Automation: Our AI technology handles complex tasks, freeing your team from over 100 hours of manual work.

Why waste valuable resources?

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9. Find an Auditor

Choose an auditor who:

• Understands Your Industry: For relevant insights and advice.
• Communicates Effectively: Facilitates a smoother process.

P.S. We have a guide where you can learn more about choosing the right CPA firm for your audit.

10. Undergo the SOC 2 Audit

Schedule the Audit Efficiently

Coordinate to minimize disruptions:

• Team Availability: Ensure key personnel are present.
• Operational Considerations: Avoid peak business periods.
• Pre-Audit Meetings: Align expectations and clarify procedures.

Be Prepared for Each Stage:

• Readiness Assessment: Initial evaluation
• Remediation Period: Address findings
• Formal Audit: Conducted by an independent CPA.

Understanding the process reduces stress and enhances efficiency.

11. Post-Audit Activities

Review Audit Findings

Examine your SOC 2 report thoroughly:

• Unmodified (Clean) Opinion: Indicates compliance—congratulations!
• Modified Opinions: Highlight areas needing attention.

Address Issues Promptly

If issues are identified:

• Develop an Action Plan: Outline corrective measures.
• Implement Changes: Update controls and policies.
• Document Responses: Maintain records for future audits.

Update Stakeholders

Communicate results transparently:

• Internal Teams: Inform staff of outcomes and next steps.
• Clients and Partners: Share successes and how you're addressing any issues.

12. Continuous Monitoring and Maintenance

Proactive compliance is more cost-effective than dealing with fines, as shown by a Globalscape and Ponemon study.

Implement Ongoing Monitoring

Establish continuous compliance processes:

• Real-Time Tracking: Use tools to monitor activities.
• Regular Reviews: Schedule periodic assessments.
• Stay Updated: Keep abreast of SOC 2 standard changes.

Following SOC 2 guidelines strengthens your security posture.

Maintain and Update Controls

Regularly review and adjust controls:

• Adapt to New Threats: Evolve your defenses proactively.
• Audit Your Tech Stack: Ensure all tools are up-to-date and secure.

Build Out Your Security Tech Stack

Invest in essential security tools:

• Password Managers
• Web Application Firewalls
• Vulnerability Scanners

Keep an inventory of technologies and assess them regularly for vulnerabilities.

Common Pitfalls to Avoid in SOC 2 Compliance

Here are the five main pitfalls to avoid:

1. Viewing SOC 2 as a One-Time Task

Treating SOC 2 compliance as a checkbox exercise is a significant mistake.

• Ongoing Commitment: Compliance should be an ongoing effort, integrating security practices into your organization's culture.
• Continuous Improvement: Regularly update controls to adapt to emerging threats and business changes.

2. Inadequate Documentation and Training

Without proper documentation, proving compliance becomes challenging.

• Document Everything: Meticulously record all policies, procedures, and controls.
• Employee Training: Ensure your team understands their roles in maintaining compliance to prevent accidental breaches.

3. Improper Distribution of SOC 2 Reports

SOC 2 reports are confidential and intended for specific stakeholders.

• Controlled Sharing: Only share reports with authorized parties who have a legitimate interest.
• Maintain Confidentiality: Unauthorized distribution can breach agreements and erode trust.

4. Underestimating Resource Requirements

Achieving SOC 2 compliance requires significant time and effort.

• Resource Planning: Allocate sufficient time and personnel to the compliance process.
• Avoid Overload: Prevent overwhelming your team by planning ahead and setting realistic timelines.

5. Neglecting Third-Party Risks

Overlooking the security practices of vendors can jeopardize your compliance.

• Vendor Management: Ensure all third-party partners adhere to appropriate security standards.
• Regular Assessments: Periodically evaluate vendors' compliance status.

Overcoming Challenges in SOC 2 Audits

Some ways to prevent and overcome challenges:

1. Utilize Compliance Automation Tools Early

Leverage technology to streamline your compliance efforts.

• Automate Processes: Use platforms that automate evidence collection and manage requirements.
• Increase Efficiency: Reduce manual workload and minimize errors.

2. Conduct Regular Process Reviews

Compliance is not static.

• Periodic Assessments: Regularly review and update your controls.
• Stay Current: Adapt to changes in standards and emerging threats.

3. Establish a Robust Evidence Collection System

Effective evidence gathering is essential.

• Organized Documentation: Implement systems to collect and organize necessary documents.
• Simplify Audits: Ease the auditor's review process by having evidence readily available.

4. Manage Deadlines Effectively

Deadlines are crucial in the compliance process.

• Tracking System: Use calendars or project management tools to monitor tasks and deadlines.
• Timely Completion: Ensure requirements are met without last-minute stress.

Cut Your SOC 2 Compliance Time and Costs in Half with EasyAudit

Traditional compliance methods are a drain on time and resources. They demand hundreds of hours of manual work, complex documentation, and the constant fear of missing critical details.

But what if you could slash your SOC 2 compliance timeline from eight months down to just three and reduce your compliance expenses from $100,000 to under $30,000.

How?

With EasyAudit.

EasyAudit transforms this process by harnessing advanced AI technology to automate over 100 hours of tedious tasks.

Instead of sifting through endless checklists and generic templates, you get custom-crafted security controls tailored specifically to your business.

No more one-size-fits-all solutions that leave gaps in your defenses.

We know skepticism is natural, which is why we offer a free trial. Experience firsthand how EasyAudit can accelerate your compliance journey without any commitment.

Join the ranks of businesses that have saved up to $70,000 and shaved months off their compliance timeline with EasyAudit.

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FAQs

Is SOC 2 Compliance Mandatory for My Business?

Technically, SOC 2 compliance isn't legally required. But if you're a service provider handling client data, it's becoming the industry standard you can't afford to ignore. Achieving SOC 2 compliance isn't just about meeting expectations — it's about proving to clients and stakeholders that you take data security seriously.

In today's competitive market, where trust is a valuable currency, this commitment sets you apart. It shows that you're not just claiming to protect data — you have the credentials to back it up.

Moreover, SOC 2 compliance strengthens your internal governance. Implementing its rigorous controls helps you identify and mitigate security risks proactively, establishing solid processes that safeguard your data infrastructure.

By embracing SOC 2 standards, you position your business as a reliable partner, opening doors to new opportunities.

How Long Does It Take to Become SOC 2 Compliant?

The timeline for achieving SOC 2 compliance isn't the same for everyone. It can take anywhere from several months to over a year, influenced by factors like your organization's size and existing security measures.

If you already have robust security policies in place, you're ahead of the game, and the process may move faster. Starting from scratch? Be prepared for a longer journey.

But there's a way to speed things up. By proactively enhancing your security controls and leveraging automation tools, you can streamline the compliance process significantly. Efficient planning and smart resource allocation are key to reducing your time to compliance.

Can Small Businesses Achieve SOC 2 Compliance?

Absolutely. Small businesses can — and should achieve SOC 2 compliance.

Obtaining this certification demonstrates to clients and partners that you prioritize data protection, bolstering trust and credibility.

We know the traditional compliance process can be overwhelming for smaller teams. Limited resources and tight budgets make the lengthy, costly journey seem daunting.

But it doesn't have to be that way.

EasyAudit simplifies SOC 2 compliance for small businesses.

• Cuts costs from up to $100,000 to under $30,000.
• Reduces compliance time from several months to just a few weeks.
• Automates over 100 hours of manual work, freeing your team to focus on what you do best.
• Provides custom security controls tailored to your operations—not generic templates.

Why let compliance hurdles hold you back from growth?

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What Happens After the SOC 2 Audit?

Completing the SOC 2 audit isn't the finish line — it's the start of an ongoing commitment to security excellence. The audit report offers valuable insights into your security posture, highlighting strengths and pinpointing areas for improvement.

Communicating that your company is SOC 2 compliant helps build trust with prospects. It demonstrates your dedication to data security, which can be the decisive factor in securing new business.

Aligning SOC 2 compliance with other frameworks and regulations can also streamline your overall compliance efforts, making it easier to meet multiple standards simultaneously.

Staying vigilant ensures your security controls remain effective, keeping you ahead of emerging threats.

How Can I Verify if a Third-Party Service Provider Is SOC 2 Compliant?

When partnering with third-party service providers, trust but verify. Request their SOC 2 report — a document prepared by an independent auditor detailing their controls over security, availability, processing integrity, confidentiality, and privacy.

Reviewing this report lets you assess whether the provider meets the necessary compliance standards and aligns with your security requirements. It's an essential step in due diligence to ensure your partners uphold the same level of data protection that you maintain within your organization.

Working with SOC 2 compliant providers strengthens your overall security posture and mitigates third-party risks.