What is SOC2 Compliance ?

SOC2 is an organization that determines how standard companies and other independent bodies would handle customer data. It works under the American Institute of CPAs which dictates the terms on which companies should regulate customer data that they collect for their functioning. 

Their objective is to mainly maintain a standard of security, privacy, confidentiality, and integrity. They tailor their report to fit the needs of each organization. Each organization must follow certain protocols or principles in their conduct which reflects in these reports. A company’s business partners, clients, and other invested parties can evaluate how it functions and maintains confidentiality over its data through these internal reports. 

SOC2 reports are of two types- Type I and Type II. 

Type I: It focuses on the organization’s consistency in keeping up with their principles and method of functioning. 

Type II: It looks at the operational and execution aspect of the company’s performance. 

Importance of SOC2 Compliance 

If a company complies with SOC2 requirements, it indicates that they maintain a high level of integrity and handles sensitive information with utmost security. 

  • Good security practice- If a company complies with SOC2, it will assure its clients of improved security practices that will protect their sensitive information from cyber attacks. 
  • Advantage over other companies- Companies with improved security practices will easily appeal more to its clientele and help them gain advantage within the competitive market. 

Who performs SOC Audit?

SOC audit is often done by CPAs (Certified Public Accountants) and other accounting firms. AICPA issues guidelines that must be adhered to at the time of auditing. It helps set a standard for the quality of work the auditors perform. Each of the audits made under AICPA is subjected to peer review. 

An audit can be prepared by any individual hired by the CPA organizations. If the audit passes all the standards set by AICPA, only then the AICPA logo is put on it. 

Regulations followed by SOC checklists:

  • Accessibility- SOC2 Compliance checklist restricts unauthorized access to the personal data and information that it collects.  
  • Management- Any changes that are made on the system are approved first. This prevents unauthorized, rash changes.  
  • Monitor- All ongoing operations are monitored thoroughly. This allows the system to detect any deviation from the approved procedure.  
  • Risk reduction- Consistent monitoring, improved security programs, and strict attention on authorized accessibility makes the organization less prone to cyber attacks and reduces risks. 

Other Criteria for SOC2 compliance 

Other than the basic levels of SOC2 compliance, if an organization deals with high level sensitive information such as banking or financial industry, then they need to adhere to a higher level of criteria for SOC2 compliance. 

Customers would always prefer an organization that would meet all the requirements of SOC2 compliance, especially in the age of advanced technology which makes sensitive data vulnerable. 

Here are the higher levels of SOC2 Compliance criteria:

  • Customer accessibility- A customer would prefer it if they can access their information under the agreed terms and conditions of the organization. 
  • Procedural integrity- The reports made on the processing and the systematic functioning of the organization should contain detailed information on the policies and the principles followed in the process. 
  • Privacy- A company must maintain confidentiality on the data collected from the customer. It must stay true to its claim of confidentiality and break down in its reports how it proceeds with it. If a company claims to warn their clients every time their personal data is used, then it must explain the procedure in detail. 
  • Confidentiality- A company must state all the restrictions it maintains in sharing personal data of their customer. 

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