SOC 2 (System and Organization Controls 2) is a voluntary compliance standard that ensures service providers are properly managing and protecting sensitive data. Developed by the American Institute of Certified Public Accountants (AICPA), SOC 2 offers a structure for auditing and reporting on an organization’s internal controls to ensure the security, availability, processing integrity, confidentiality, and privacy of the data.
To achieve SOC 2 compliance, an organization must undergo an audit by a third-party CPA firm. The auditors verify whether the organization’s controls meet the SOC 2 criteria. After completing the evaluation, the CPA firm produces a comprehensive report on the audit’s findings. There are two types of reports that auditors can create:
1. SOC 2 Type 1: This report evaluates how well an organization has designed and implemented its internal controls at a specific point in time. It is the simpler and quicker of the two report types.
2. SOC 2 Type 2: This report evaluates how well an organization has designed and implemented its internal controls over a period of time. It takes longer to produce but provides more assurance of the controls’ effectiveness.
The auditor’s report indicates whether the organization has passed or failed the audit. If the organization passed, the auditor certifies that the organization has achieved SOC 2 compliance, specifying either Type 1 or Type 2. This certification helps to assure clients, customers, partners, and other interested parties that the organization can be trusted with their data, as covered by the SOC 2 assurances.
At the heart of the SOC 2 standard are the Trust Services Criteria (TSC). The TSC expand on each Trust Services Principle and provide control criteria for evaluating and reporting on controls over information and systems. The TSC are categorized into five broad categories, which are:
1. Security: This category focuses on protecting systems against unauthorized access or disclosure of sensitive information, as well as system damages that could compromise data availability, integrity, confidentiality, or privacy.
2. Availability: The criteria in this category ensure that the protected systems and information meet the availability and use requirements defined by the organization’s objectives.
3. Processing Integrity: This category ensures that processing operations are complete, accurate, timely, and secure, as required by the organization’s objectives.
4. Confidentiality: The criteria in this category ensure that systems and operations meet the confidentiality requirements defined by the organization’s objectives.
5. Privacy: This category focuses on ensuring that all personally identifiable information meets the collection, usage, retention, disclosure, and disposal requirements defined by the organization’s objectives.
These categories provide a structure for understanding the general nature of the criteria, but the actual organization of the TSC in the SOC 2 standard is more complex. The TSC are organized into 13 trust categories, including five core categories, four supplemental categories, and four specialty categories. Each category includes multiple Trust Services Principles, and each principle includes a set of related criteria.
For example, the first trust category is Control Environment (Trust ID CC1). Within this category, there are five principles, with CC1.1 stating that the “entity demonstrates a commitment to integrity and ethical values.” Each principle also includes criteria, which are referred to as “points of focus.”
The core trust categories (CC1-CC5) focus on the organization’s commitment, efforts, and ability to carry out its objectives and support the functioning of internal controls. The supplemental trust categories (CC6-CC9) address specific aspects such as logical and physical access controls, system operations, change management, and risk mitigation.
In addition to these core and supplemental categories, the SOC 2 standard defines four specialty trust categories that specifically address availability, processing integrity, confidentiality, and privacy.
SOC 2 is an important compliance standard that organizations can achieve to demonstrate their commitment to securely managing and protecting data. By undergoing the necessary audits and meeting the criteria outlined in the Trust Services Criteria, organizations can build trust with their clients, customers, partners, and other stakeholders, assuring them that their data is in safe hands.