SOC 2 compliance requirements

What is SOC 2 Compliance?

SOC 2 (Service Organization Control 2) is like a security badge that shows your company takes data protection seriously. It’s a set of standards that businesses—especially those handling sensitive customer data—need to follow to ensure their systems are secure, private, and reliable. It focuses on five Trust Service Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy. Think of it as a framework to prove to your customers that you’re doing everything possible to protect their information.

Definition and Purpose of SOC 2

SOC 2 compliance is a set of standards designed for companies that handle sensitive customer data. It lays out specific guidelines to help organizations maintain strong security and privacy practices.

The main purpose of SOC 2 is to give customers peace of mind by proving that the organization is following industry best practices to safeguard their data. It’s all about building trust and showing that you’re serious about keeping customer information safe and secure.

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Benefits of SOC 2 Compliance for Customer Data Protection

SOC 2 compliance offers multiple benefits when it comes to protecting sensitive data:

  1. It safeguards sensitive information from unauthorized access, misuse, or alterations, ensuring your customers’ data is secure.

  2. By achieving SOC 2 compliance, you’re showing your commitment to data security and privacy, which is something customers and partners value.

  3. This builds trust, making clients more comfortable working with you and partners more confident in collaborating, ultimately helping to grow your business.

Understanding the SOC 2 Framework

Overview of the SOC 2 Framework and Its Components

The SOC 2 framework, developed by the American Institute of Certified Public Accountants (AICPA), is all about making sure organizations handle customer data securely.

At the heart of SOC 2 are five Trust Services Criteria (TSC) that form the foundation of its standards:

  1. Security criteria (common criteria): Protects systems against unauthorized access.

  2. Availability: Ensures systems are available and functional.

  3. Processing Integrity: Guarantees data is processed accurately.

  4. Confidentiality: Keeps sensitive information private.

  5. Privacy: Ensures personal information is collected and handled responsibly.

These criteria are used to evaluate whether a company is meeting the standards for data security and protection.

Trust Services Criteria (TSC) and Points of Focus

The Trust Services Criteria (TSC) set the foundation for SOC 2 compliance by offering guidelines for structuring audits. They focus on key areas like security, availability, and privacy to ensure customer data is properly protected.

To make things clearer, the TSC also come with “points of focus,” which are practical examples that help organizations implement the necessary controls. These points of focus break down how companies can meet each TSC requirement in real-world scenarios, ensuring they have a solid approach to protecting and managing customer data.

SOC 2 Trust Services Criteria (TSC)

Pro tip: For your first SOC 2 audit report, it is often advised to focus on the Security controls (Security requirements) only. This is the only common criteria SOC 2 compliance requirements from the trust services criteria.

Security criteria: Protecting Customer Data and Systems (common criteria)

The Security criterion protects organizational and sensitive data from unauthorized access by ensuring only authorized personnel can view or handle it. This includes implementing controls logical and physical access – logical access (like requiring strong passwords or multi-factor authentication) and physical access controls (such as restricting entry to server rooms).

Additionally, it involves security controls like firewalls, encryption, and regular vulnerability testing, as well as risk management strategies to identify and mitigate potential security threats. All of this helps ensure that data is safe from hackers, unauthorized personnel, and potential breaches.

Availability: Ensuring Access Systems

The Availability criterion ensures that data is available when needed for its intended function and can be quickly recovered in case of a technical failure, cyberattack, or data breach. This means that systems and data must remain accessible to authorized users, especially during critical moments.

Controls under this criterion include proper management of system inputs, regular data backups, and robust recovery solutions. Disaster recovery planning is also key, as it outlines the steps your organization will take to restore services and data after an unexpected event, minimizing downtime and business disruption.

Confidentiality: Protecting Sensitive Information

The Confidentiality criterion focuses on safeguarding sensitive information, ensuring it is protected from unauthorized access, use, disclosure, alteration, or destruction. This is particularly important for companies that handle sensitive customer data, intellectual property, or proprietary business information.

Controls to meet this criterion include strict access controls that limit who can view or modify confidential data, encryption to protect data both at rest and in transit, and data classification to ensure that sensitive information is identified and handled appropriately. By implementing these controls, organizations can reduce the risk of data leaks and ensure that confidential information remains secure.

Processing Integrity: Ensuring Accurate and Reliable Processing

The Processing Integrity criterion ensures that data is processed accurately, completely, and in a timely manner, supporting the organization’s objectives. This is essential for businesses where reliable and precise data processing is critical, such as financial transactions or order management systems.

Key controls include data validation to ensure that inputs are correct, data reconciliation to confirm that processed outputs match expected results, and system monitoring to track and address any issues in real-time. These controls help ensure that data handling processes are reliable, reducing the risk of errors or inconsistencies that could impact business operations or customer trust.

Privacy: Protecting Personal Information

Privacy ensures that personally identifiable information (PII) is properly managed and safeguarded throughout its lifecycle—from collection to storage and transmission. This criterion is crucial for maintaining customer trust and complying with legal and regulatory requirements related to data privacy.

Key controls include strict guidelines for data collection (ensuring only necessary data is collected), secure data storage (using encryption or access controls to prevent unauthorized access), and safe data transmission (using secure channels like encryption during data transfer). For example, when an e-commerce company collects customer payment details, they only request relevant data like card numbers and addresses, securely store it using encryption, and transmit it over encrypted channels to protect from breaches.

SOC 2 Compliance Requirements

To achieve SOC 2 compliance, organizations must implement controls that align with the five Trust Services Criteria (TSC): Security, Availability, Processing Integrity, Confidentiality, and Privacy. These controls ensure the protection and proper handling of customer data.

Additionally, organizations must undergo a SOC 2 audit conducted by an independent third-party auditor. This audit verifies that the implemented controls meet the necessary standards and are operating effectively. The audit results in a report that organizations can share with customers and partners to demonstrate their compliance efforts and commitment to data security.

Controls and Procedures for Meeting SOC 2 Requirements

To comply with SOC 2, organizations need to design and implement internal controls that align with the five Trust Services Criteria (TSC). These controls include measures like access restrictions, encryption, system monitoring, and incident response plans.

In addition, organizations must maintain thorough documentation of their controls and procedures. This includes policies that outline how data is handled, how risks are managed, and how security measures are implemented. Proper documentation ensures that auditors can verify that these controls are in place and functioning effectively, which is key for passing a SOC 2 audit.

SOC 2 Readiness Assessment and Audit

Before undergoing a SOC 2 audit, organizations should conduct a readiness assessment to identify any gaps in their controls. This assessment helps pinpoint areas where your security, availability, processing integrity, confidentiality, or privacy controls might not meet SOC 2 standards.

Once gaps are identified, the organization must take steps to remediate them—whether it’s updating policies, implementing new security measures, or improving existing processes. Addressing these gaps in advance will make the official audit smoother and increase your chances of passing.

If you’re looking for a quick, efficient way to assess your compliance, my AI-powered SOC 2 Readiness Assessment tool can help. It provides fast, detailed insights into your current compliance status, highlighting gaps and offering actionable steps to close them—so you’re well-prepared for your audit.

Types of SOC 2 Audits: Type 1 and Type 2

SOC 2 type 1 vs type 2

A SOC 2 Type 1 audit evaluates the design and implementation of your controls at a specific point in time. It checks whether your controls are designed properly to meet SOC 2 criteria, but it doesn’t assess how those controls perform over time.

  • Type 1 audit: evaluates the design and operating effectiveness of controls at a single point in time.

In contrast, a SOC 2 Type 2 audit evaluates not only the design but also the operating effectiveness of your controls over a period of time (usually between 3 to 12 months). This provides a more comprehensive view of how your controls are functioning on an ongoing basis.

  • Type 2 audit: evaluates the design and operating effectiveness of controls over a period of time.

If you’re deciding between Type 1 and Type 2, be sure to check out my detailed blog post on SOC 2 Type 1 vs. Type 2 to help you make the best decision for your organization.

What to Expect During a SOC 2 Audit

A SOC 2 audit is carried out by a certified public accountant (CPA) or a qualified third-party auditor. The process typically involves reviewing your organization’s internal controls, procedures, and documentation.

During the audit, the auditor will:

  • Evaluate your organization’s controls and how they align with the five Trust Service Criteria (TSC).

  • Test the effectiveness of these controls (especially in a SOC 2 Type 2 audit).

  • Request evidence and documentation to confirm that your controls are designed and working as intended.

Expect questions around how you manage data, handle security incidents, and protect sensitive information. Having everything organized beforehand will make the process smoother.

Achieving and Maintaining SOC 2 Compliance

Implementing Controls and Procedures for Ongoing Compliance

To ensure ongoing SOC 2 compliance, organizations must establish robust controls and procedures that are actively maintained. This involves implementing security, availability, and privacy measures that protect customer data, as well as continuously monitoring these controls to ensure they are effective.

Key steps include:

  • Implementing Controls: Put in place the necessary security, availability, confidentiality, processing integrity, and privacy controls that align with SOC 2 requirements.

  • Ongoing Monitoring: Regularly review and test your controls to ensure they are functioning as expected. Use automated monitoring tools to detect and address issues quickly.

  • Periodic Audits and Reviews: Schedule periodic internal audits and assessments to identify potential gaps and ensure your organization stays compliant over time.

By taking a proactive approach and using the right tools, such as the Complete SOC 2 Policy Template Package, you can prevent compliance drift and ensure your organization is always ready for audits or client Vendor Risk Assessments.

Monitoring and Reviewing Compliance Status (especially in SOC 2 type II)

  • Organizations must monitor and review compliance status regularly.

  • Organizations must address non-conformities and take corrective actions.

Addressing Non-Conformities and Corrective Actions

When non-conformities are identified during monitoring or an audit, you must act swiftly to address them. Non-conformities refer to any controls or processes that do not meet SOC 2 requirements.

Key steps include:

  • Identify the Root Cause: Determine why the non-conformity occurred. Was it a missing control, a process failure, or a lack of documentation?

  • Implement Corrective Actions: Take steps to fix the issue. This could involve updating controls, revising procedures, or retraining employees.

  • Track and Document: Keep detailed records of all corrective actions taken, including timelines and responsible personnel. This documentation shows auditors that your organization actively manages compliance issues.

Addressing non-conformities promptly helps to ensure ongoing compliance and avoids potential setbacks during future audits.

SOC 2 Compliance for Service Organizations

Benefits and Requirements for Service Organizations

Service organizations must comply with SOC 2 to demonstrate their commitment to data security and privacy, which helps build trust with customers and partners. SOC 2 compliance shows that an organization follows best practices to safeguard sensitive information.

To achieve this, service organizations are required to implement controls that meet the Trust Services Criteria (TSC): Security controls, Availability, Processing Integrity, Confidentiality, and Privacy. These controls ensure data is protected, processes are accurate, and customer information is handled securely.

Best Practices for SOC 2 Compliance

Implementing Effective Controls and Procedures

To achieve SOC 2 compliance, organizations must focus on implementing effective controls and procedures that meet the five Trust Services Criteria (TSC). This involves putting in place strong security, availability, and privacy measures, as well as establishing clear processes for monitoring and maintaining these controls over time.

Key best practices include:

  • Implementing Effective Controls: Ensure that your security and privacy controls are robust and aligned with SOC 2 requirements. This includes access control, data encryption, and system monitoring. For a simple, stress-free way to kickstart your compliance program, download my SOC 2 Compliance Checklist and ensure you’re on the right track.

  • Maintaining Documentation: Keep detailed records of all controls, procedures, and processes. Proper documentation is essential for the audit process and ensures transparency for both auditors and clients.

  • Gap Analysis and Readiness Assessment: Start your compliance journey by conducting a gap analysis to identify missing controls. Use tools like my SOC 2 Readiness Assessment to gain insights into where you stand and what you need to improve. This helps you focus your efforts and address gaps well before your SOC 2 audit.

Maintaining Ongoing Compliance

  • Organizations must maintain ongoing compliance with SOC 2 requirements.

  • Organizations must monitor and review compliance status regularly.

SOC 2 Compliance Checklist

Pre-Audit Checklist: Preparing for a SOC 2 Audit

  • Understand the Trust services criteria and controls. For that this free SOC 2 Compliance Checklist is an awesome starting point.

  • Conduct a readiness assessment to identify gaps in controls. Tools such as the AI-powered SOC 2 Readiness Assessment can save you months.

  • Remediate the gaps in controls you have discovered with the assessment tool or with your internal audit. Make sure to address these gaps before the audit. If you want to get your SOC 2 Policies without the headaches then tailored SOC 2 policy package is for you!

  • Implement controls and procedures based on the gap analysis to meet SOC 2 requirements.

  • Maintain documentation of controls and procedures.

Conclusion

Summary of Key Points

  • SOC 2 compliance is a set of security and privacy standards for service organizations that handle customer data.

  • Organizations must implement controls to meet the SOC 2 TSC.

  • Organizations must undergo a SOC 2 audit by a third-party auditor.

Final Thoughts on SOC 2 Compliance Requirements

  • SOC 2 compliance is essential for service organizations that handle customer data.

  • Organizations must implement effective controls and procedures to meet SOC 2 requirements.

  • Organizations must maintain ongoing compliance with SOC 2 requirements.