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SOC 2 Audit: What is it?

SOC 2 (Service Organization Control) audit reports provide detailed information on a service organisation’s services and controls that are relevant to security, availability, processing integrity, confidentiality and/or privacy. The reporting structure is overseen by the American Institute of Certified Public Accountants (AICPA).

Trust Services Principles (TSP)

A SOC 2 audit is conducted against the AICPA TSP. This is an industry-recognised, third-party assurance standard for auditing service organizations such as Cloud service providers, software providers, and developers, web marketing companies and financial services organizations.Service organizations have to select which of the TSP are required to mitigate the key risks to the service or system that the organization provides:

1. Security: The system is protected against unauthorised access (both physical and logical).

2. Availability: The system is available for operational use as committed or agreed.

3. Processing integrity: System processing is complete, accurate, timely and authorised.

4. Confidentiality: Information designated as confidential is protected as committed or agreed.

5. Privacy: Personal information is collected, used, retained, disclosed and destroyed in conformity with the commitments in the service organization’s privacy notice, and with criteria set forth in generally accepted privacy principles issued by the AICPA.

Aligned frameworks

The TSP are closely aligned with the following standards and frameworks:

  • ISO 27001 and ISO 27002 (information security management)
  • Payment Card Industry Data Security Standard (PCI DSS)
  • HIPAA security standards
  • NIST SP 800-53 (Security and Privacy Controls) and SP 800-66 (Implementing HIPAA Security Rule)
  • DoD 8500.2 (Information Assurance Implementation)
  • NERC-CIP (Critical Infrastructure Protection)

What to expect of a SOC 2 audit report?

The SOC 2 audit report provides assurance about the suitability of the design and effectiveness of the service organization’s controls to its clients, management, and user entities. The report is generally restricted-use for existing or prospective clients.

SOC audits and reports fall into two types according to the length of observation involved:

  • Type I - an audit and report carried out on a specified date.
  • Type II - an audit and report carried out over a specified period of time, usually a minimum of six months.

A SOC 2 audit report includes:

  • An opinion letter;
  • Management assertion;
  • A detailed description of the system or service;
  • Details of the TSP selected;
  • Tests of controls and the results of testing; and
  • Optional additional information.

It also specifies whether the service organization complies with the AICPA TSP. Some organizations require their service providers to undergo a SOC Type II audit for the greater level of assurance and reporting detail it provides.

Who are SOC 2 audits designed for?

SOC 2 audits are targeted at any organization (Cloud computing, SaaS, PaaS, etc.) that provides services and systems to client organizations. The client company may ask the service organization to provide an assurance audit report, particularly if confidential or private data is being entrusted to the service organization.

Many organizations offer a wide range of Cloud-based services and systems that include private financial and medical information. If your organization provides Cloud services, a SOC 2 audit report will go a long way to establishing trust with customers and stakeholders. A SOC 2 audit is often a prerequisite for service organizations to partner with or provide services to tier-one organisations in the supply chain.

Who can perform a SOC audit?

A SOC audit can only be performed by an independent Certified Public Accountant (CPA) or accountancy organisation. SOC auditors are regulated by the AICPA; they must adhere to specific professional standards established by the AICPA. They are also required to follow specific guidance related to planning, executing and supervising audit procedures. AICPA members are also required to undergo a peer review to ensure their audits are conducted in accordance with generally accepted auditing standards.

CPA organizations may employ non-CPA professionals with relevant information technology and security skills to participate in preparing for a SOC audit, but the final report must be provided and issued by a CPA. A successful SOC audit carried out by a certified CPA permits the service organization to use the AICPA logo on its website.

Why choose IT Governance?

IT Governance specialises in providing IT governance, risk management, compliance solutions and consultancy services, with a special focus on cyber resilience, data protection, cyber security and business continuity.

In an increasingly punitive and privacy-focused business environment, we are committed to helping organizations protect themselves and their customers from the perpetually evolving range of cyber threats. Our deep industry expertise and pragmatic approach help our clients improve their defences and make key strategic decisions that benefit the entire organization.

Speak to an expert

For more information on how IT Governance can help with your SOC 2 Audit, please contact us by using the methods below.