In today’s complex digital landscape, businesses and their clients consider data security and privacy of first importance, going to great lengths to ensure information security.
In this climate, any organization handling sensitive customer information needs to demonstrate a commitment to robust security practices, and this is where SOC 2 compliance comes into play.
In this comprehensive guide, we will discuss SOC2 and how an organization can achieve and maintain compliance.
What Is SOC 2 and Why Is It Important?
Definition and purpose of SOC 2
System and Organization Controls 2 (SOC 2) is a framework developed by the American Institute of Certified Public Accountants (AICPA) as part of a suite of services to ensure that organizations maintain proper controls to protect customer data. It is specifically designed for organizations storing customer data in the cloud, making it particularly relevant in today’s business environment, where technology advances daily and cloud services have substantially increased in common use.
The primary purpose of SOC 2 is to provide assurance to clients and stakeholders that an organization has implemented the necessary controls to safeguard sensitive information. This compliance framework focuses on five key areas: security, availability, integrity, confidentiality, and privacy of data.
Key differences between SOC 2 and other SOC reports
While SOC is part of a broader scope of SOC reports, it distinguishes itself from other frameworks in several important ways.
The first is within the scope: While SOC reports focus on financial data control, SOC 2 covers the five key areas we discussed above: security, availability, integrity, confidentiality, and privacy.
The second is in its purpose: SOC 2 covers security and operational measures reporting on non-financial controls, whereas SOC reviews controls influencing financial reporting, and is primarily used by companies where there is likelihood of impact on their clients’ financial statements.
Lastly, SOC2 covers the effectiveness of control over a longer period of time, whereas SOC 1 does not. Additionally, SOC 3 provides a general-use report (vs a restricted-use report) and is therefore not quite the same as SOC 2, in which more detail can be provided.
SOC 2 stands out because it has a comprehensive approach to data security and because of its relevance to a wide range of service organizations, from cloud computing to SaaS companies.
Benefits of SOC 2 compliance for service organizations
Achieving SOC 2 compliance offers a number of advantages to service organizations.
SOC 2 compliance demonstrates a commitment to data security, which in turn instills confidence in clients and partners. This leads to enhanced trust and credibility.
In a world that normalizes data breaches, and a market that finds them increasingly common, SOC 2 compliance can be a simple way to set an organization apart from competitors, creating a competitive advantage.
Similarly, SOC 2 compliance can lead to improved risk management. Identifying and addressing potential vulnerabilities in a system is a natural by-product of the compliance process.
This can also lead to a shift in effectiveness. Implementing SOC 2 controls standardizes processes within an organization, thus streamlining operations.
While SOC 2 stands alone, many SOC 2 controls align with other compliance standards. This can make meeting regulatory requirements easier.
SOC 2 Certification Process
Overview of the SOC 2 certification process
The SOC 2 certification process is fairly straightforward, containing several important key steps.
Scoping determines which trust service criteria are relevant to an organization and which systems and processes will be included in the audit.
During readiness assessment, an internal review is conducted, helping to identify gaps in the current controls. This also serves to develop a plan to address them.
During implementation, necessary controls and processes are put into place to ensure SOC 2 requirements are met.
A certified public accountant (CPA) then performs a SOC 2 audit. The organization receives a report detailing the auditor’s findings. The auditor will also give an account of his or her opinion to assist in strengthening the overall security posture.
Criteria and requirements for achieving SOC 2 compliance
The five trust service criteria mentioned above are the foundation of SOC 2 compliance. Organizations, however, can select which criteria are relevant to their own operations. The common criteria, security, is mandatory for all SOC 2 reports, while the rest are optional.
Security ensures no unauthorized access, no data breaches, and reduces system vulnerabilities.
Availability ensures that systems are available for use and operational as agreed.
Processing integrity verifies that the system’s processing is authorized, timely, accurate, and complete.
Confidentiality serves to protect information designated confidential. Privacy is concerned with the collection, use, and retention of personal information, as well as disclosure and disposal.
Within these are found the scope of SOC 2.
SOC 2 Requirements for Passwords
Because password security is such an important component of a security strategy, the security criterion requires stringent adherence to password hygiene guidelines.
This means all passwords must meet the required minimum password length (ordinarily 8-12 characters) and must be considered complex (meaning they have a combination of letters, numbers, and special characters including a mix of upper and lowercase letters.)
Passwords must also be changed regularly. (For most, this means every 90 days.)
Multi-factor authentication (MFA) must be in use, and there must be a password history component to prevent reuse.
Lastly, the account should lock upon a specified number of login attempts.
How long does it take to obtain a SOC certification?
This can vary depending on the organization’s complexity, size, and current security posture.
On average, it takes 6-12 months to complete the process.
Within this time frame, it typically takes 2-4 months to prepare and do the readiness assessment, while the implementation of controls can take between 3 and 6 months. The audit process itself takes an average of 1-2 months.
It’s important to keep in mind that SOC 2 compliance is an ongoing process, not a one-time achievement. Monitoring is required to maintain compliance.
Key Components of a SOC 2 Report
Understanding the structure and content of a SOC 2 report
The SOC 2 report arrives in sections, and it’s important to understand the structure.
First is the auditor’s opinion, an overall assessment of the organization’s compliance within the selected trust service criteria.
A statement from the organization’s management is included, commenting on their responsibility for ensuring effective controls are in place.
A system description lays out an overview of the systems and services within the organization and lays out the scope of the audit.
Detailed information about the criteria used for the audit follows, along with a description of the controls implemented relating to each criterion selected, and an explanation of its use.
The auditor, who has tested each control, provides the results of these tests. They will then provide logical conclusions, including any exceptions or deviations that were identified.
Different sections and control objectives included in the report
Like all security systems and configurations, SOC 2 reports cover a variety of control objectives and, in the case of SOC 2, also cover alignment with the trust service criteria.
The report covers logical and physical access controls, system operations and monitoring, change management, risk assessment and mitigation, information and communications, and data backup and recovery procedures.
Interpreting the findings and recommendations in a SOC 2 report
When interpreting the findings and recommendations in a SOC 2 report, note the auditor’s opinion, and look for indications of full compliance.
Also, note any areas where controls were found to be ineffective or inconsistently applied– any exceptions or deviations.
It’s important to review how the organization will address any unidentified issues via a thorough review of the management’s responses. Lastly, pay attention to the role and responsibility a client has in maintaining the effectiveness of the organization’s security controls.
Maintaining Ongoing SOC 2 Compliance
Best practices for continuous SOC 2 compliance
To maintain SOC 2 compliance, there are a few key practices to keep in mind.
A strong employee security awareness program is always a best practice in any setting.
Regularly updated and patched systems and software also contribute to a strong security posture.
There are other things an organization can do to work towards SOC 2 compliance.
- Conduct periodic internal audits and vulnerability assessments to ensure compliance.
- Maintain detailed documentation of all security policies and procedures.
- Implement continuous monitoring tools. These can detect and respond to security incidents.
- Establishing a formal change management process can also be useful.
Periodic assessments and audits to ensure compliance
Since regular assessments are a crucial aspect of obtaining and maintaining SOC 2 compliance, let’s go over some simple ways to ensure compliance: the periodic audit.
Conduct quarterly internal reviews of controls and processes, eventually performing annual risk assessments to identify new threats or vulnerabilities. Using a certified CPA firm, engage in annual SOC 2 audits. It’s also important to implement continuous control monitoring tools.
Addressing common challenges in maintaining SOC 2 compliance
Like every framework, there are common challenges in maintaining compliance. Without a robust threat intelligence component, it’s difficult to keep up with evolving threats. Stay informed about emerging risks and update controls accordingly.
Require SOC 2 compliance from vendors and implement a vendor management program. It is common in the security industry to need to balance security with usability. Involving end-users in the conversation and design of controls can be helpful so that none of these hinder productivity. It is also possible to automate certain processes and leverage compliance management tools.
SOC vs Other Compliance Frameworks
Comparison of SOC 2 with other industry compliance frameworks
SOC 2 is comprehensive, but it also relates to other frameworks that may need to be implemented as well. For example, HIPAA is specifically designed for healthcare organizations and involves the privacy of customer data, so SOC 2 and HIPAA can complement each other.
Another example is ISO27001, which focuses on information security management systems. Both frameworks share common controls. PCI DSS focuses on payment card data security. SOC 2 can enhance this framework by providing broader data protection outside the scope of financial information.
How SOC 2 aligns with data privacy regulations
SOC 2’s privacy criteria closely align with the General Data Protection Regulation (GDPR) requirements, especially in areas like data protection and user rights. SOC 2 controls support compliance with the California Consumer Privacy Act (CCPA), and the Personal Information and Electronic Documentation Act (PIPEDA) as well.
Choosing the right compliance framework for your organization
Choosing the right compliance framework means looking objectively at your organization’s mission and your client’s needs. Consider your industry and any regulatory requirements. Assess each client’s compliance needs and expectations. Evaluate the scope of your services and which types of data you handle and consider the geographical regions in which you operate. It’s also important to assess the cost and resource requirements for different frameworks.
Implementing SOC 2 Controls With LastPass
LastPass is a robust security tool with a variety of advantages for those seeking SOC 2 compliance. A password manager enforces strong password policies and excellent password hygiene. While LastPass facilitates secure password sharing within teams, it also provides detailed access logs for auditing purposes and helps manage and rotate passwords. LastPass also supports multifactor authentication, making it a significant contributor when moving towards SOC 2 compliance.
Leveraging LastPass for Secure Password Management
How a password manager can help with SOC2 compliance
Several key features align with SOC 2 compliance. LastPass creates complex passwords, unique for each account, safely and securely encrypting these in the vault. Stringent access controls and password health monitoring are additional features that align with SOC 2 Compliance.
Role of LastPass in achieving SOC 2 compliance
LastPass can play a critical role in meeting specific SOC 2 criteria. Security, confidentiality, and Availability can all be addressed.
LastPass enhances access controls and protects against unauthorized access, ensures sensitive credentials are securely stored and shared safely, and provides reliable, foolproof access to necessary credentials for authorized users.
Features and benefits of LastPass for service organizations
LastPass provides simplified password management across an organization, creating a reduced risk of password-related security incidents. Improved productivity through easy and secure access ensures that an organization can stay both secure and productive. Enhanced visibility and control over password practices create a context for compliance with end-users and support compliance with multiple frameworks.
Ultimately, SOC 2 compliance is a step that demonstrates an organization’s commitment to data security and privacy. By understanding the SOC 2 framework, implementing appropriate controls, and leveraging tools like LastPass, it’s clear that trust can be built with clients and partners.
SOC 2 compliance is an ongoing journey, rather than a destination. Staying vigilant, continuously improving your processes, and adapting by staying informed and choosing new and helpful tools will ensure success in maintaining trust.
