SOC 2 Audit: Top 5 Mistakes Businesses Must Avoid
The IT world has seen significant growth and expansion over the past few years, with increasingly complex cyber attacks becoming a common occurrence. This, in turn, has led companies to turn towards cyber insurance to ensure that they are protected against cyber-attacks and losses incurred due to the same. One of the most commonly used controls while protecting against these cyber-attacks is the SOC 2 audit.
However, many companies fail such audits because of their lack of knowledge about the different steps involved in performing an SOC 2 audit. In this article we will share with you the top 5 mistakes to avoid before starting a SOC 2 audit.
What is SOC 2 Audit?
A SOC (System and Organization Controls) 2 audit is an independent evaluation of a company’s information security controls. The purpose of a SOC 2 audit is to assess whether the controls are adequate and effective in protecting the confidentiality, integrity, and availability of the company’s systems and data. These three key assessment elements can also be summarized as the CIA Triad. An organization looking to comply with the standards of SOC 2 audit, must ensure the satisfaction of the CIA Triad elements.
What is a SOC 2 audit report?
A SOC 2 audit report is an in-depth analysis of an organization’s security controls and procedures. The report covers all aspects of security, from physical security to information security. A SOC 2 audit is conducted by an independent third party and provides assurance that the organization has adequate security controls in place to protect its customers’ data. The third party auditor evaluates an organization’s security infrastructure based on the following five evaluation aspects:
- Availability
- Security
- Privacy
- Confidentiality
- Processing Integrity
Businesses failing in one or more aspects of security are denied compliance with the SOC 2 standard and are required to improve the lacking areas in order to apply for compliance again.
Who are SOC 2 Audits Designed For?
SOC 2 audits are aimed at leading organizations that provide critical IT services and infrastructure to other businesses and key institutions such as Military, Government and National entities. Examples of services provided by such companies include; managed IT services, infrastructure as a service (IaaS), cloud services, cybersecurity, banking and so on.
Organizations that are looking to work with Government institutions are required by the law to comply with SOC or various other standards. Compliance with SOC 2 becomes critical if you are an organization offering various digital services and aiming to work with the Government or other reputed national and international organizations.
A SOC 2 audit is designed to provide evidence that your organization has implemented the controls required by the American Institute of Certified Public Accountants (AICPA). Compliance with this standard also implies compliance with the provisions of ISO/IEC 27001 and other applicable industry standards such as NIST SP 800-53 and PCI DSS, among others. Therefore, implementing SOC 2 compliant security controls will help your organization achieve compliance with other relevant information security standards and regulations.
Levels of SOC 2 Audit
There are three levels of SOC 2 audit: Type 1, Type 2, and Type 3.
- Type 1 is the most basic level and simply tests for compliance with the company’s written policies and procedures.
- Type 2 goes a step further and tests for the effectiveness of the controls in place.
- Type 3 is the highest level and includes a review of the company’s entire system.
A thorough SOC 2 audit will include all three levels, but it is not always necessary to perform a Type 3 review. A higher level of compliance may be required if your organization deals with customers who expect more rigorous security standards or operates in an industry where data breaches are frequent occurrences such as healthcare providers and financial institutions.
Top 5 SOC 2 Audit Mistakes Businesses Must Avoid
SOC 2 audits can be exhausting, resource-consuming and costly. Therefore, it pays to avoid common mistakes many businesses make while undergoing this audit. To get started, below are the top five mistakes businesses must avoid in order to successfully pass the SOC 2 audit.
1) Not understanding the requirements
One of the most common mistakes companies make is not understanding the requirements of the SOC 2 audit. The SOC 2 audit is designed to assess controls related to security, availability, processing integrity, confidentiality, and privacy of customer data. To pass the audit, your company must have appropriate controls in place that meet or exceed the expectations of the auditor. Failure to adequately understand these expectations can lead to a failed SOC 2 audit.
2) Inadequate Funds
SOC 2 audits can be costly. In fact, SOC 2 Type 2 reports cost an average of $30-60k for the audit alone, and can cost companies more than $100k altogether. It is a common mistake made by many companies is not preparing for the costs associated with an SOC 2 audit. By preparing for these costs, you will be able to ensure that you are compliant before you begin an audit as well as having adequate funds on hand should you need them during an audit.
3) Starting an audit without a baseline
The first step in any audit is to establish a baseline. This baseline will be used to measure your progress and compliance against the relevant controls. Without a baseline, it will be difficult to accurately assess your compliance posture. Additionally, if you’re audited for a different standard (such as PCI DSS), you’ll need to gather additional documentation that supports those standards as well.
4) Not identifying risks early enough
One of the most common mistakes is not identifying risks early enough in the process. By the time you get to the audit, it’s too late to make changes and you will likely fail. Make sure you have a good understanding of your company’s risks before starting the audit process. Talk with your team about any potential risks and be able to recognize them when they happen. If you don’t know what the risks are or how they affect your business then you won’t be able to address them during an audit so this should be done beforehand. Additionally, conduct organization-wide risk and vulnerability assessments to identify and mitigate potential risks.
5) Missing input from key stakeholders
Not getting input from all the key stakeholders in your organization can result in information silos and miscommunications. You must communicate audit requirements to all key stakeholders of your business before undergoing the audit. This includes not only management but also front-line staff and anyone else who has a role to play in the security of the company’s systems and data. Without input from these people, it’s impossible to get an accurate picture of the company’s risks and how to best mitigate them.
![]()
Bonus Tip:
Over-investing in people: It’s not uncommon for companies to hire or outsource an army of experts during an audit process. Unfortunately, this can lead to false positives or over-compliance because they spend too much time on things that don’t really matter versus what needs attention and improvement.
Conclusion
Though SOC 2 compliance is a costly and time taking process, it does have its benefits and rewards. SOC 2 compliance demonstrates that a company has taken the necessary steps to protect customer data. This, in turn, can boost customer confidence and lead to more business. In addition, SOC 2 compliance can help a company avoid hefty fines and penalties if customer data is breached. However, businesses must avoid common mistakes and prepare effectively in order to maximize the chances of a successful audit.
Preparing for a SOC audit? Let us help!
Kacidy Inc. is a Washington DC based consulting company offering state-of-art digital security, compliance and business consultancy services. Our industry veterans with decades of industry experience, deeply understand the nuts and bolts of regulatory audits such as PCI DSS, SOC 1, SOC 2, SOC 3, ISO 27001 and can help you pass an audit seamlessly.
