Understanding the SOC 2 Certification

Introduction

SOC 2 (Service Organization Control 2) certification is a framework designed by the American Institute of CPAs (AICPA) to help organizations manage customer data based on five Trust Service Criteria: , confidentiality,processing integrity, availability, security and privacy. This certification is crucial for service organizations that store or process customer data in the cloud.

Comparison of Various SOC Certification Versions

SOC 1 (Service Organization Control 1)

  • Focus: SOC 1 is centered around internal control over financial reporting. It is particularly relevant for service organizations that impact their clients’ financial statements.
  • Users: Primarily used by financial auditors and companies that outsource services impacting financial operations.
  • Types: There are two types of SOC 1 reports:
    • Type I: Assesses the suitability of the design of controls at a specific point in time.
    • Type II: Examines the effectiveness of controls over a defined period.

SOC 2 (Service Organization Control 2)

  • Focus: SOC 2 addresses controls relevant to security, availability, processing integrity, confidentiality, or privacy, based on the AICPA’s Trust Services Criteria.
  • Users: Useful for management, customers, regulators, and other stakeholders concerned with information security and privacy.
  • Types: Like SOC 1, SOC 2 also offers Type I and Type II reports, focusing either on the design of controls at a point in time or their effectiveness over time.

Note: There is also SOC 3, but it is out of scope of this article.

 

Who Should Certify?

SOC 2 certification is essential for any organization that handles customer data, particularly cloud service providers, SaaS companies, and data centers.

It’s also relevant for companies in healthcare, finance, and other sectors where data security is paramount.

Why Certify?

Organizations pursue SOC 2 certification to demonstrate their commitment to data security, build customer trust, and comply with industry regulations. It also helps them stand out in competitive markets and avoid the financial and reputational damage associated with data breaches.

What Is Certified?

SOC 2 certification verifies that an organization adheres to robust information security policies and procedures. The certification evaluates five trust service criteria:

  1. Security: Protection of system resources against unauthorized access.
  2. Availability: Accessibility of the system as agreed upon.
  3. Processing Integrity: System processing is complete, valid, accurate, timely, and authorized.
  4. Confidentiality: Protection of confidential information.
  5. Privacy: Collection, use, retention, and disposal of personal information is in line with the organization’s privacy notice.

While some security frameworks like ISO 27001, PCI DSS, TISAX, HIPAA  have rigid requirements, SOC 2 considers that controls are unique to every organization.

Each company designs its own controls to comply with its Trust Services Criteria.

An independent auditor is then brought in to verify whether the company’s controls satisfy SOC 2 requirements.

After the audit, the auditor writes a report about how well the company’s systems and processes comply with SOC 2.

Every organization that completes a SOC 2 audit receives a report, regardless of whether they passed the audit.

There are two types of SOC 2 reports:

  • SOC 2 Type I reports evaluate a company’s controls at a single point in time. It answers the question: are the security controls designed properly?
  • SOC 2 Type II reports assess how those controls function over a period of time, generally 3-12 months. It answers the question: do the security controls a company has in place function as intended?

To choose between the two, consider your goals, cost, and timeline constraints.

A Type I report can be faster to achieve, but a Type II report offers greater assurance to your customers.

 

 

Topics Verified in SOC 2 Certification

1. Security

The Security Criteria are also known as the Common Criteria. They prove that a service organization’s systems and control environment are protected against unauthorized access and other risks.

Security is the only Trust Services Criteria required for every SOC 2 audit. The other criteria can be added to your report scope if your organization chooses, but they are not required to achieve SOC 2 compliance.

These are the security criteria needed for SOC 2:

  • CC1 — Control environment
    Does the organization value integrity and security?
  • CC2 — Communication and Information
    Are policies and procedures in place to ensure security? Are they communicated well to both internal and external partners?
  • CC3 — Risk Assessment
    Does the organization analyze risk and monitor how changes impact that risk?
  • CC4 — Monitoring Controls
    Does the organization monitor, evaluate, and communicate the effectiveness of its controls?
  • CC5 — Control Activities
    Are the proper controls, processes, and technologies in place to reduce risk?
  • CC6 – Logical and Physical Access Controls
    Does the organization encrypt data? Does it control who can access data and restrict physical access to servers?
  • CC7 – System Operations
    Are systems monitored to ensure they function properly? Are incident response and disaster recovery plans in place?
  • CC8 – Change Management
    Are material changes to systems properly tested and approved beforehand?
  • CC9 – Risk Mitigation
    Does the organization mitigate risk through proper business processes and vendor management?

Implementation: Organizations must establish and maintain a set of security controls to protect against unauthorized access. This includes firewalls, encryption, access controls, and intrusion detection systems.

Audit: Auditors examine security policies, test the effectiveness of security controls, and review incident response plans.

Responsibility: Chief Information Security Officers (CISOs) and IT security teams are typically responsible for implementing and maintaining these controls.

2. Availability

Implementation: Ensuring systems are available involves implementing redundancy, disaster recovery plans, and maintaining system performance monitoring.

Audit: Auditors assess the organization’s ability to meet service level agreements (SLAs) and review backup and recovery procedures.

Responsibility: IT operations teams and service managers oversee availability aspects.

3. Processing Integrity

Implementation: Organizations must ensure that data processing is accurate and complete. This includes validating input data, processing logic, and output accuracy.

Audit: Auditors review data processing controls, check for errors, and validate processing integrity.

Responsibility: Data quality teams and IT personnel are responsible for maintaining processing integrity.

4. Confidentiality

Implementation: Protecting confidential information involves data encryption, access controls, and secure storage solutions.

Audit: Auditors evaluate the measures in place to protect confidential data and check compliance with confidentiality agreements.

Responsibility: Data protection officers (DPOs) and compliance teams handle confidentiality matters.

5. Privacy

Implementation: Organizations must adhere to privacy policies that govern the collection, use, and disposal of personal data. This involves data anonymization and consent management.

Audit: Auditors examine privacy policies, consent forms, and data handling procedures to ensure compliance with relevant privacy laws.

Responsibility: Privacy officers and legal teams are responsible for privacy compliance.

Conclusion

SOC 2 certification is a comprehensive framework that ensures organizations adhere to best practices in data security and management.

By certifying under SOC 2, organizations can demonstrate their commitment to protecting customer data, comply with regulatory requirements, and gain a competitive edge in the market.

Implementing and maintaining SOC 2 controls requires collaboration across various teams, including IT, security, operations, and legal departments, to ensure continuous compliance and security.

The post Understanding the SOC 2 Certification first appeared on Sorin Mustaca on Cybersecurity.

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