What is a SOC 2 audit?
A SOC 2 audit provides an IT service organization with a standardized way to give clients and their auditors insight into the controls and processes applicable to the service. In a SOC 2 engagement, an independent audit firm evaluates the service organization’s control objectives and controls. A formal SOC 2 assurance report includes a statement from the auditor. This provides existing and potential customers with insight into the quality of the IT services you offer to your users. It demonstrates that you are SOC 2 compliant.
The SOC 2 assurance report differs from other, traditional certifications because it is more comprehensive and is conducted annually through an audit. SOC 2 distinguishes between two types of reports: SOC 2 Type 1 and SOC 2 Type 2.
Difference between Type 1 and Type 2
SOC 2 distinguishes between Type 1 and Type 2 reports.
- Type 1 audit assesses the design of an IT service organization’s processes and controls.
- Type 2 audit is an annual review. It assesses whether the organization has actually operated in accordance with the processes and controls identified in the Type 1 audit.
Benefits of SOC 2 for IT Service Organizations
- The quality of the processes outsourced to you is guaranteed to your clients.
- You receive confirmation from an external party that your organization is well managed.
- The auditor of a user organization can rely on this report for the audit of financial statements.
- It is no longer necessary for clients to send auditors to your premises.
- Your organization is “in control,” and you communicate this to (potential) clients.
SOC 2 Approach 2-Control
Our objective is to issue an assurance statement regarding security (mandatory), availability, integrity, confidentiality, and/or privacy, as outlined in the SOC 2 guidelines issued by the Assurance Services Executive Committee (ASEC) of the AICPA.
To achieve this objective, we will work with you through the following phases:
- Baseline Assessment:
a. Alignment of scope;
b. Alignment of standards. - Assessment of the description and design of controls: SOC 2 Type 1 audit
a. Verifying the accuracy of the system description;
b. Determining the design of controls through, among other things, interviews, reviewing documentation and controls, observation, testing, and sampling;
c. Comparing actual performance against standards;
d. Assessing quality and reporting on the description and design (SOC Type 1 report). - Assessment of the effectiveness of control measures: SOC 2 Type 2 audit
a. Periodically assessing the effectiveness of control measures through methods such as interviews, observation, testing, and sampling;
b. Comparing actual performance against standards;
c. Quality assessment and reporting (SOC 2 Type 2 report).
Ultimately, however, it is often the client’s (the user organization’s) requirements that determine which type of report is chosen. What does the client need, what does the customer want assurance on, and for what purpose? An assurance report is never mandatory, but it can lead to more effective collaboration and greater trust between the supplier and the customer.
Differences between SOC 2 and ISO 27001
- ISO 27001 is a security standard that includes guidelines for an organization’s information security. SOC 2 is an audit standard for outsourced IT processes. For this reason, ISO 27001 offers limited added value to an auditor.
- ISO 27001 also lacks an assessment framework, unlike SOC 2.
- An ISO audit ultimately leads to a certificate, while SOC 2 leads to an assurance report.
- A SOC 2 assurance report provides the client with insight into the organization, resources, and processes that ensure the quality of automated data processing at the IT service organization. This insight is lacking when based on an ISO certificate.
Differences between SOC 2 and ISAE 3402
- ISAE 3402 is primarily used to provide an opinion on processes that impact financial reporting. Examples include the outsourcing of accounting, credit management, asset management, real estate management, payroll and HR services, and pension administration. SOC 2 is used by IT service organizations to provide clients with assurance regarding security, availability, integrity, confidentiality, and/or privacy.
- For readers of a SOC 2 assurance report, it is immediately clear on what criteria this assurance is based. Under SOC 2, the auditor must use the so-called prescribed Trust Service Criteria as the assessment framework. Readers of an ISAE 3402 assurance report can only determine the criteria on which the assurance is based by reviewing the details of the report. The assessment criteria under ISAE 3402 are not prescribed.
SOC 2 support provided by 2-Control
We have years of experience with SOC 2 processes at IT service organizations. Our firm consists of an enthusiastic team of NOREA-registered IT auditors (REs) who will guide you from start to finish in obtaining SOC 2 Type 1 and SOC 2 Type 2 statements. We assist with SOC 2 audits for startups and scale-ups.
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