SOC 2 Requirements: Complete List & Guide For Your Company

If your business is looking to become SOC 2 compliant, you’re in the right place.

In this guide, we’ll list the complete SOC 2 requirements and explain how to comply with them. 

First, let’s start by understanding the Trust Services Criteria (TSC), as the entire SOC 2 framework is built on these criteria.

What are the SOC 2 Trust Services Criteria?

The TSC is the central element that establishes the SOC 2 framework. It has five categories, each with specific criteria for assessing a service organization’s environment. 

1. Security 

All other requirements are optional when getting SOC 2 compliant, except for security, which makes it an integral part of the compliance. 

The Security criterion focuses on protecting an organization’s systems from unauthorized access to cyberattacks. This covers everything from malicious software to individual attacks that try to access your servers. 

An auditor might check for security controls like implementing a firewall and two-factor authentication to protect against unauthorized access and having a policy for vetting security staff. 

2. Availability 

This criterion emphasizes that systems remain operational and accessible.

It focuses on minimizing downtime and ensuring continuous access to services. Auditors will look for practices like having a disaster recovery plan and regular system backups. 

This includes evaluating how well systems can handle unexpected events and how capacity management is handled.

3. Processing Integrity

Processing Integrity is key for SOC 2 compliance. 

It concentrates on the accuracy and completeness of data processing and ensures that systems process information correctly and consistently. 

Auditors will check for controls that maintain accurate records of inputs and outputs, methods for detecting and correcting errors, and processes that guarantee services or products meet required specifications.

4. Confidentiality

The Confidentiality criterion for SOC 2 compliance focuses on managing sensitive information that must be shared securely. 

This involves protecting data exchanged between parties, such as through encryption.

Auditors will review how confidential information is identified, retained, and disposed of, as well as the policies for managing its secure exchange and deletion.

5. Privacy 

The privacy criterion applies to how an organization collects, uses, retains, and disposes of personal information.

To comply with this policy, an organization must communicate its policies to everyone whose data they store. 

An example can be obtaining consent from users before collecting their data and ensuring the privacy policy is written in clear, jargon-free language.

Additionally, the organization must ensure that it:

• Limits the amount of private information they collect. 
• Gathers it as per the law. 
• Uses it only for intended and necessary purposes. 
• Discards the information properly once the data retention period ends. 

While the TSC outlines key areas, you can use different controls to meet the criteria if your organization complies with the TSC requirements.

P.S: To learn how you can implement match the TSC efficiently, check out our complete guide on getting SOC 2 compliant.

What are the SOC 2 requirements?

The American Institute of Certified Public Accountants (AICPA), creators of SOC 2, does not outline the SOC 2 requirements in a document or checklist form. 

To achieve SOC 2 compliance, your organization must adhere to specific requirements within the Trust Services Criteria (TSC). 

These criteria encompass various aspects of data security and operational integrity, ensuring your systems are protected and function as intended. 

Below is a detailed breakdown of these requirements:

1. Security (Common criteria)

• Access Controls: Implement measures to restrict access to systems and data exclusively meant for authorized individuals. This includes strong passwords, multi-factor authentication (MFA), and role-based access controls.
• Network Security: Protect your network from unauthorized access by implementing firewalls, intrusion detection systems (IDS), and secure network protocols.
• Physical Security: Ensure that physical access to your data centers and hardware is restricted to authorized personnel only, with security measures such as surveillance and biometric access.
• Monitoring and Alerting: Monitor systems for unusual activity and set up alerts to detect and respond to security incidents in real-time.
• Incident Response: Develop and maintain an incident response plan that outlines procedures for identifying, reporting, and mitigating security breaches.

2. Availability

• Disaster Recovery Plan: Establish a disaster recovery plan that includes backup strategies, recovery time objectives (RTO), and recovery point objectives (RPO) to ensure minimal downtime.
• System Monitoring: Continuously monitor the availability of critical systems and services to detect and address issues promptly.
• Capacity Management: Implement procedures to ensure your IT infrastructure can handle peak loads and unexpected demand without compromising performance.
• Redundancy: Incorporate redundancy in your systems, such as multiple data centers or failover mechanisms, to ensure continuity in case of hardware or software failures.

3. Processing Integrity

• Data Validation: Implement controls to ensure your data is processed accurately, completely, and promptly. This includes input validation and verification processes.
• Error Handling: Establish procedures for detecting, reporting, and correcting errors in data processing to ensure the integrity of outputs.
• Transaction Monitoring: Continuously monitor and audit transactions to ensure they are processed according to established business rules and criteria.
• Change Management: Develop a change management process that ensures any modifications to systems or processes are reviewed, tested, and approved before implementation.

4. Confidentiality

• Encryption: Use strong encryption methods to protect confidential data both at rest and in transit. This includes using SSL/TLS for secure communication and encrypting sensitive files and databases.
• Data Masking: Implement data masking techniques to obfuscate sensitive information, making it accessible only to those who need it for legitimate purposes.
• Access Control: Restrict access to confidential information based on the principle of least privilege, ensuring that only those with a legitimate need can view or modify sensitive data.
• Data Retention and Disposal: Establish policies for the retention and secure disposal of confidential data, ensuring that information is only kept for as long as necessary and is securely destroyed when no longer needed.

5. Privacy

• Privacy Policies: Develop and communicate clear privacy policies that outline how personal information is collected, used, stored, and shared. Ensure these policies comply with applicable laws and regulations.
• Consent Management: Obtain and document consent from individuals before collecting their personal data, ensuring they know how their information will be used.
• Data Minimization: Collect only the personal information necessary for the intended purpose and ensure that it is stored securely and used only for the stated purposes.
• Data Subject Rights: Implement procedures to allow individuals to exercise their rights under privacy laws, such as the right to access, correct, or delete their personal information.

Quick reminder of the SOC 2 compliance framework

At a glance, the SOC 2 framework looks something like this:

How do you ensure that your SOC 2 ready?

The SOC 2 readiness assessment is an examination that a service auditor performs. 

It is a preliminary requirement to determine whether your organization is fit for a SOC 2 audit. It also helps resolve loopholes in your control and devise a plan to fix them. 

Therefore, a readiness assessment is like a mock exam before the SOC 2 audit. 

Once your organization reviews the TSC, determines which criteria apply, and documents internal controls, it should run a readiness assessment. 

At the end of the assessment, you’ll receive a letter explaining the areas of improvement so you can become SOC 2 compliant. 

This letter helps you fill the gaps so you don’t waste resources and time when the actual auditor comes. 

Whether you decide to hire a third-party consultant or conduct the assessment yourself, here’s what you should know:

• Map your goals to the TSC.
• Check for loopholes such as missing controls or more documentation for your processes. 
• Develop a plan to hit timelines and deliverables and fill the loopholes before the actual thing. 

However, readiness assessments can be costly, often double the cost of using SOC 2 compliance software. 

For instance, the traditional path to a Type II report costs approximately $50,000 to $100,000.

With EasyAudit, you can reduce this cost by up to $50,000 and save considerable time. 

Plus, it saves you from lots of admin work, too. 

Get to see EasyAudit in action.

SOC 2 compliance checklist

Many companies fail to attain SOC 2 compliance because they set the wrong precedents. For instance, a lack of active leader involvement leads to a slow audit. 

Another mistake organizations make is thinking a SOC 2 report is limited to security controls and compliance. 

Compliance also examines other core processes, such as onboarding and offboarding, risk assessments, vendor management, policy writing, and other elements. 

Let’s go through some of the basic steps. 

1. Initial setup/audit readiness

• Choose applicable categories and criteria.
• Document current controls. Identify gaps.
• Fill gaps with necessary controls.
• Complete key activities before control testing.
• Collect evidence of control activities.
• Test controls using evidence. Identify issues.
• Fix issues. Retest controls.
• Using EasyAudit, generate your complete SOC 2 report (including section 3 - Description of System) to provide to the auditor.

2. External audit process

• Receive and distribute auditor's evidence requests.
• Check evidence and submit it to auditors.
• Auditors test controls and perform walkthroughs.
• Prepare and review the audit report.
• Final audit report provided.

3. Maintaining compliance

A major misconception around SOC 2 compliance is that you won’t have to look into it once you get it. 

That’s a huge misunderstanding. 

SOC 2 compliance isn’t a one-time thing. The reports must be sent out every year, so continuous compliance is necessary. 

Even if you get a good report in one year, it doesn’t necessarily mean you’ll get one in the next one. 

A couple things to account for, which could mess up your report: 

• Employees not following established policies.
• Poor or outdated compliance documentation.
• Failed to update controls as the organization evolves.
• Introducing non-compliant vendors.
• Lack of continuous system monitoring.
• Slow response to security incidents.
• Not regularly reviewing and improving processes.

 To avoid these from happening:

• Set a schedule for recurring control tests.
• Collect evidence regularly.
• Test controls and identify issues.
• Fix issues and retest controls.
• Continue testing and remediation until all issues are resolved.

Compliance is a constant challenge, especially for SMBs with limited resources. A single manual oversight can lead to devastating consequences. 

What are the consequences of not getting compliant with SOC 2?

A lot of your business depends on SOC 2 compliance.

If clients see you’ve gone through the audit, it adds value to your organization and positions its brand value better when doing business. 

Without compliance, you risk losing out on a lot of opportunities. 

Did you know? A data breach costs businesses on average $4.88 million, depending on various factors such as industry and company size. 

Moreover, SOC 2 compliance aligns your internal processes and strengthens your overall security protocols, making you a clear winner in the market. 

Here’s what happens if you try to conduct business under non-compliance:

# 1 - Higher chance of security breaches

In 2023 alone, there was a 72% increase in data breaches compared to 2021. 

These numbers highlight the importance of equipping yourself with necessary measures like SOC 2 compliance. 

Besides, non-compliance just means you’re openly inviting cyberattack data breaches and are ready to compromise your business’s reputation at the expense of damaging it. 

#2 - Missed clientele and business opportunities 

In the B2B industry, adhering to certain security standards, particularly data protection and privacy, is necessary if you plan on scaling your business and thriving in the market.  

If you’re not compliant with SOC 2, you can’t potentially bid on contracts, secure big vendors, or partner with industry leaders. 

#3 - Loss of trust 

No business can run without clients and stakeholders.  

Non-compliance with SOC 2 results in no business and positions your organization as uncommitted to data security. 

It damages your reputation and makes you vulnerable to client loss, making it harder to find new clients. 

#4 - Legal charges and penalties 

Depending on your industry, you might face legal consequences if you fail to meet security standards. 

These can lead to hefty charges, regulatory penalties, and whatnot. SOC 2 ensures your business doesn’t go through any of that. 

How does SOC 2 compare with other frameworks?

Here’s a comparison table of SOC 2 with other frameworks. 

Takeaway - Don’t Sleep on Your Business’s Future by Ignoring SOC 2 Compliance 

The traditional way to attain your SOC 2 audit is lengthy and demands significant investment of time, money, and other resources. 

But with EasyAudit, you can get compliant in half the time and at half the cost compared to traditional methods.

How?

By leveraging Generative AI, we combine industry best practices, AICPA SOC 2 guidelines, and your organization’s specific needs to deliver high-quality documentation, which saves your team 100+ hours of manual work and up to $50,000 in compliance costs.

Book a guided demo and see for yourself!

FAQs

What are the mandatory controls for SOC 2 compliance?

The only mandatory criterion for SOC 2 compliance is Security, which focuses on protecting your organization’s systems against unauthorized access and data breaches. 

This includes implementing access controls, network security measures like firewalls, and continuous monitoring for suspicious activity. 

However, depending on your organization’s operations, you may need to implement additional controls related to Availability, Processing Integrity, Confidentiality, and Privacy to fully comply with SOC 2.

How does SOC 2 define the requirements for data encryption?‍

SOC 2 requires that all confidential and sensitive data be protected through encryption both at rest and in transit. 

This means implementing strong encryption protocols such as SSL/TLS for data transmitted over networks and encrypting data stored in databases and backups. 

The goal is to ensure that unauthorized parties cannot access or read the data, maintaining its confidentiality and integrity.

What documentation is required to demonstrate SOC 2 compliance?

To demonstrate SOC 2 compliance, your organization must maintain comprehensive documentation that includes policies and procedures for security, availability, processing integrity, confidentiality, and privacy. 

This documentation should cover access control policies, incident response plans, data handling procedures, and evidence of regular audits and control tests. 

Proper documentation is crucial for the external auditor to evaluate your compliance with the SOC 2 criteria.

What role does vendor management play in SOC 2 compliance?

Vendor management is critical in SOC 2 compliance, as third-party service providers can introduce risks to your organization. 

SOC 2 requires that you assess and manage the security practices of third-party vendors with access to your systems or data. 

This includes conducting due diligence, establishing security requirements in contracts, and regularly monitoring vendor compliance with these requirements to ensure they meet SOC 2 standards.

How do you ensure ongoing compliance with SOC 2 requirements?‍

Ongoing SOC 2 compliance requires regular monitoring and testing of your security controls. 

This includes conducting periodic reviews of your policies and procedures, testing controls to identify and remediate any issues, and continuously monitoring for new environmental risks or changes. 

SOC 2 also mandates that any changes to your systems or processes be assessed to ensure they do not compromise compliance. 

Regular audits and maintaining up-to-date documentation are also essential to staying compliant year-round.