SOC 2 Type 2 Report: Benefits, Process & Best Practices

There is a near-constant rate of cyber attacks with 1 attack occurring every 39 seconds according to a Clark School study.

But it’s not just about the money. Customers are freaking out about their data security, and who can blame them? They want more than a pinky promise — they need rock-solid proof that their sensitive info is, well, kept sensitive.

That’s where the SOC 2 Type 2 report steps in.

In this article, we'll explore what makes SOC 2 Type 2 stand out from other SOC reports, how it can supercharge your business, how much it costs, and the steps you need to get compliant.

What is a SOC 2 Type 2 report?

SOC 2 Type 2 report is a security framework created by the American Institute of Certified Public Accountants (AICPA) that assesses how service organizations, which handle customer data, safeguard sensitive information over an extended period, typically between 3 and 12 months.

Think of it as a detailed scorecard that reflects how effectively a company implements its security protocols and procedures, ensuring continuous protection of sensitive information.

This report centers on these five essential Trust Services Criteria (TSCs):

Trust Service Criteria	Explanation
Security	The Security criteria ensure that information and systems are safeguarded against unauthorized access, disclosure, and damage. It is mandatory for all SOC 2 reports, and organizations must implement and maintain controls across nine key focus areas to protect the integrity and security of their systems, including: CC1: Control Environment; CC2: Communication and Information; CC3: Risk Assessment; CC4: Monitoring Activities; CC5: Control Activities; CC6: Access Controls; CC7: System Operations; CC8: Change Management; CC9: Risk Mitigation.
Availability	The Availability criteria focus on ensuring that systems are operational and accessible when needed by users. Organizations must establish controls that guarantee systems are resilient and capable of meeting operational demands, which includes maintaining sufficient system capacity and backup procedures.
Confidentiality	The Confidentiality criteria aim to protect sensitive information classified as confidential within the system. Organizations are required to implement specific controls to prevent unauthorized access and disclosure of confidential information, ensuring that only authorized individuals can access or share this data.
Processing Integrity	The Processing Integrity criteria ensure that system processing is accurate, complete, valid, and timely. This involves establishing controls that validate data inputs and outputs, verify processing accuracy, and ensure that transactions are authorized and executed as intended to support the entity's objectives.
Privacy	The Privacy criteria are designed to protect personal information collected, used, retained, disclosed, and disposed of by the organization. Due to the comprehensive and specific nature of privacy requirements, organizations must implement a wide range of controls to manage how personal data is handled throughout its lifecycle, adhering to applicable privacy regulations and standards.

Who needs a SOC 2 Type 2 report?

Now, a SOC 2 Type 2 audit isn't just for cloud-based vendors vying for enterprise clients; it holds value for various types of businesses.

While the list of potential beneficiaries is extensive, we recommend you consider a SOC 2 if your business meets any of the following criteria:

Criteria	Explanation
Handling Sensitive Data	If your company processes or stores sensitive customer information, such as personal, financial, or health data, a SOC 2 Type II audit demonstrates your commitment to safeguarding this data with stringent security measures.
Serving Regulated Industries	Businesses operating in industries with strict regulatory requirements, like finance, healthcare, or insurance, will benefit from SOC 2 compliance to meet industry standards and provide assurances to clients and regulators.
Seeking Enterprise Contracts	If your company is targeting large enterprises that prioritize data security, SOC 2 Type II compliance can be a key differentiator, showing potential clients that you adhere to high standards of data protection.
Competing Against Uncertified Rivals	In a market where competitors may not be SOC 2 certified, having this certification helps you stand out by proving your dedication to robust security practices and transparent processes.
Recovering from Security Incidents	For businesses that have experienced data breaches or security issues, a SOC 2 Type II audit serves as a critical step in rebuilding trust, demonstrating that you have implemented effective controls to prevent future incidents.
Enhancing Customer Trust	If your company wants to build or maintain trust with customers by providing independent verification of your security practices, a SOC 2 Type II report offers credible proof that you are committed to protecting their data.

Why is a SOC 2 Type 2 report important?

In May 2024, Dell faced a massive cyberattack that compromised 49 million customer accounts, while MOVEit experienced one of the largest breaches of 2023, with damages soaring to $12 billion.

The SOC 2 Type 2 certification not only reduces the risk of costly breaches but also positions you as a leader in data security.

Adopting SOC 2 Type 2 also helps you meet regulatory requirements and avoid the scrutiny of regulators like the GDPR and HIPAA.

Preparing for a SOC 2 Type 2 audit also highlights areas for operational improvement, making your processes smoother and more secure.

P.S: If you want to dive deeper into how to actually get SOC 2 compliant, check out our detailed SOC 2 checklist.

What is the scope of a SOC 2 Type 2 report?

The scope of a SOC 2 Type 2 report follows the American Institute of Certified Public Accountants (AICPA) guidelines. According to the AICPA criteria, an SOC 2 Type 2 report scope should focus on the following:

Infrastructure: Physical and hardware components such as networks and data centers.
Software: Applications and systems used for processing data.
People: Roles and responsibilities of personnel involved in system management and security.
Data: Management of data including storage, access, and protection.
Procedures: Manual and automated procedures that ensure consistent and secure service delivery.

The scope is tailored to the organization’s specific needs, determined by the type of data collected, storage methods, and business operations.

While the SOC 2 Type 2 report may focus on one or more Trust Services Criteria, it offers flexibility to address only the controls pertinent to the organization's operations and security requirements.

When should you conduct a SOC 2 Type 2 audit?

The AICPA does not recommend a specific time for conducting a SOC 2 audit. However, we recommend you do so during the following:

Before entering new markets: If you’re expanding into a new region or industry with stringent data protection laws, a SOC 2 Type 2 report can help smooth the transition.
When onboarding enterprise clients: Enterprise clients often have strict security requirements. Having a SOC 2 Type 2 report ready can make the onboarding process smoother and faster.
After significant changes to your IT infrastructure: If you’ve made major updates to your systems or processes, it’s a good idea to conduct a SOC 2 Type 2 audit to ensure that your controls are still effective.
Annually, as a best practice: Regular audits help maintain high-security standards and ensure ongoing compliance. Most companies opt for annual SOC 2 Type 2 audits to keep their certifications up to date.
Client requirements: Many clients, especially those in regulated industries like finance and healthcare, may require a SOC 2 Type 2 report to ensure their data is handled securely.
Contractual obligations: When entering into contracts with clients or partners, a SOC 2 Type 2 audit might be stipulated as a requirement for the duration of the agreement.

How much does a SOC 2 Type 2 audit cost?

A comparison chart showing the cost, onboarding time frame, audit duration, and total time frame for SOC 2 Type II reports between the traditional method and EasyAudit service.

The cost of a SOC 2 Type 2 audit may vary based on different factors. However, you can expect to spend as high as $100,000 through the entire process of an audit. Price may vary based on the following criteria:

Scope of the Audit: The broader the scope, the higher the cost. Auditing multiple locations or including all five Trust Services Criteria will increase the price.
Size of the Organization: Larger companies typically have more complex systems, which can drive up the cost of the audit.
Duration of the Audit: The longer the audit period, the more expensive it will be.
Audit Firm: The cost can also depend on the firm conducting the audit. Although a top-tier firm may charge a premium, it also brings more experience and expertise.

With EasyAudit, you can save up to $50,000 in costs and get compliant in as little as 8 weeks, instead of the usual 6-8 months. Schedule a demo and experience EasyAudit in action.

What are the key differences between a SOC 2 Type 1 and SOC 2 Type 2 report?

Besides a SOC 2 Type 2 report, we also have a SOC 2 Type 1 report.

While they both evaluate the design and implementation of your company's controls, the key difference between them is that a SOC 2 Type 1 report showcases controls at a specific time but the SOC 2 Type 2 report assesses the operating effectiveness of your internal controls over a 3-12-month period.

However, that's not all, let's dig a bit deeper:

	SOC 2 Type I	SOC 2 Type II
Goals	• Evaluate the design and implementation of an organization's security controls at a specific point in time.	• Evaluate the design, implementation and operating effectiveness of an organization's security controls over a specified period of time.
Pros	• Less expensive due to design-only control assessment.	• Evaluates both the design & operational effectiveness of controls.
Cons	• Only assesses the design of controls at a single point in time without evaluating operational effectiveness.	• More expensive due to extended period of evaluation and complexity in testing controls.
Time Frame	• Typically completed within a few weeks to a couple of months.	• Typically takes between 3-12 months to complete.

How does SOC 2 Type 2 compare to other security frameworks?

Aside from the various SOCs, there are several other security standards out there, each with its purpose. An example is the ISO/IEC 27001 and the HITRUST. For a detailed comparison between ISO 27001 and SOC 2, check out our article comparing ISO 27001 vs SOC 2.

Here, we simplify these security standards and show you how they compare with the SOC 2.

Comparison	Key Differences
SOC 2 Type II vs. ISO/IEC 27001	Both focus on data security. SOC 2 Type II is aligned with AICPA standards and allows flexibility and customization. ISO/IEC 27001 is an international standard with a prescribed set of requirements, making it more structured and less flexible.
SOC 2 Type II vs. SOC 1 Type II	SOC 1 Type II focuses on controls related to financial reporting. SOC 1 Type II is more relevant for organizations processing financial transactions, ensuring controls over financial data. SOC 2 Type II covers security, availability, processing integrity, confidentiality, and privacy. SOC 2 Type II is better suited for companies handling sensitive customer data, emphasizing robust data security and privacy controls.
SOC 2 Type II vs. SOC 3	SOC 3 is a simplified, summary version of SOC 2. SOC 3 is intended for a general audience and often used for marketing or broad disclosure. SOC 3 does not contain the same level of detail as a SOC 2 Type II report. SOC 3 can be publicly shared but is less useful for in-depth analysis of security controls.

How to achieve SOC 2 Type 2 compliance faster and cheaper with EasyAudit

With EasyAudit, you can automate evidence collection, risk assessment and reporting, saving you hours of tedious work and 10,000's of dollars.

Comparison	With EasyAudit	With Other Automation Tools	With External Firm
Total Time Commitment	~40 Hours	~80 Hours May still require significant manual effort and oversight	100-150+ Hours A SOC 2 is a large undertaking with many moving pieces. It normally requires executive buy-in and regular meetings to ensure preparation stays on schedule.
Total Cost	Less than $35,000	~$50,000; may include hidden fees for additional features.	~$50,000-$100,000
Risk of Client Rejection	Low: highly accurate and customized controls reduce rejection risk.	Moderate: relying on templates and less customized controls can lead to inefficiencies and potential rejection by report users.	Low: thorough preparation by an external firm ensures compliance.
Customization	Highly customizable security controls tailored to each client's needs.	Limited customization options; may require significant manual adjustments to fit specific business needs.	Limited customization, as external firms may follow standard procedures.
Automation Level	High level of automation in evidence collection, risk assessment, and reporting through AI-driven processes.	Moderate: some automation but often lacks comprehensive features and may require manual data entry and oversight.	Low; relies heavily on manual processes and external firm expertise.
Scalability	High scalability: with automated processes and AI-driven efficiency.	Limited scalability: may require additional tools or services as the company grows.	Limited scalability: depends on external firm availability and capacity.
Reporting	Generates comprehensive, framework-specific audit readiness reports with real-time updates.	Basic reporting capabilities; may lack depth and customization needed for specific compliance needs.	Reports depend on external firm's schedule and may not be as detailed or up-to-date.

No more tedious back-and-forths or hefty bills. With a few buttons and zero IT knowledge, you can generate a self-assessment report, send it to an auditor, and get certified quickly.

Get started with EasyAudit today and simplify your path to SOC 2 Type 2 compliance.