SOC 2 FAQ For 2024

Amongst the alphabet soup of compliance requirements and voluntary standards you want to explore as a business, SOC 2 stands out as crucial for the growth of many organizations that store, process, or transmit customer data. With SOC 2, companies find it becomes easier to close deals, particularly with larger companies.

This article will answer the following 7 Frequently Asked Questions about SOC 2 in 2024:

  • How Are SOC 1 and SOC 2 Different?
  • How Is SOC 2 Type 1 Different From SOC 2 Type 2?
  • Which Makes More Sense For My Business – SOC 2 Type 1 or SOC 2 Type 2?
  • How Long Does It Take To Undergo a SOC 2 Audit?
  • What Are the Benefits of Obtaining A SOC 2 Report?
  • Can I Still Get Enterprise Clients If I Don’t Have a SOC 2 Report?
  • Is There Any Overlap Between SOC 2 and Other Standards or Compliance Requirements I Might Need?

To start, a common question people have is about the difference between SOC 1 and SOC 2. This article will focus on SOC 2, as it is the most frequently requested report by customers and is particularly important for service businesses.

Experts in compliance and standards like SOC 2 generally suggest that companies jump right to getting their SOC 2 report, as it eliminates the need to do it later down the road when you want to eventually be able to sell to mid-size companies and enterprise customers.

But first, since it is a common question, let’s dive a little deeper into the differences between SOC 1 and SOC 2 for clarification:

1. How Are SOC 1 and SOC 2 Different? 

SOC 1 and SOC 2 audits differ in scope.

SOC 1 audits focus specifically on reporting financial controls, such as those critical for transaction processing. SOC 2 audits have a more extensive scope and are generally more focused on controls that are relevant to service organizations that store, process or transmit customer data. SOC 2 audits assess controls around 5 Trust Services Criteria (TSC), including the availability of data, security, processing integrity, confidentiality, and privacy.

Under the umbrella of SOC 2, there are two types you can choose from – SOC 2 Type 1 and SOC 2 Type 2. In general, security professionals recommend companies take the leap right to SOC 2 Type 2. The next question covers the differences between SOC 2 Type 1 and SOC 2 Type 2:

2. How Is SOC 2 Type 1 Different From SOC 2 Type 2?

For SOC 2 Type 1, the tests of your controls are conducted at a specific point in time. The audit for Type 1 simply checks that your relevant controls 1) exist and 2) are designed in alignment with SOC 2 standards.

SOC 2 Type 2, however, consists of a more comprehensive audit. Type 2 tests your adherence to relevant controls over a period of time (typically at least six consecutive months). During this time, an outside auditor checks the actual efficacy of your controls and notes areas where improvement is needed.

3. Which Makes More Sense For My Business – SOC 2 Type 1 or SOC 2 Type 2?

The short answer here is that if you know you’re eventually going to want to sell to mid-size companies and enterprise businesses, SOC 2 Type 2 is your best bet. Plus, it is a more widely accepted standard as opposed to Type 1.

Another easy way to tell if you need Type 2 is if a customer specifically requests SOC 2 from you because they are probably asking for Type 2. Companies often find that it makes more sense to just go straight for Type 2 rather than having to potentially go back and do it later when a future prospect asks about it.

4. What Are the Benefits of Obtaining A SOC 2 Report?

The main purpose of a SOC 2 report is to show your customers and prospects that you take security seriously. As your business grows and you reach more prospects, it’s common to receive questions around SOC 2, especially from mid-size and large companies. Being able to provide a SOC 2 report right off the bat can speed up any type of security review processes you may need to go through when engaging with larger companies.

Basically, large companies and enterprise organizations use SOC 2 as a signal that you’ve got your security ducks in a row and that there’s a lower risk down the road of potential security or even legal issues from working with you. Your organization may not even be under consideration from these companies if you don’t have, or are working on, achieving your SOC 2 report.

Your sales team will also thank you. When prospects talk to your sales team and start asking questions like, “How secure are you?”, “Will our data be safe if we share it with you?” or “What encryption methods and protocols does your platform use to protect sensitive data during storage and transmission?” – your team won’t be scrambling to provide technical minutia and details about security measures. A SOC 2 report provides all of the answers to these questions and more.

Your team can simply provide evidence of security via the fact that you have your SOC 2 report. Having your SOC 2 reports shows that your company has established your security protocols, adhered to them, and has been audited on this over a period of months. In short, having your SOC 2 report enables you to expand your marketplace and close bigger deals.

5. Can I Still Get Enterprise Clients If I Don’t Have a SOC 2 Report?

In some cases, yes! However, there’s a big caveat here.

If you don’t have a SOC 2 report, you must provide other means of proof that you have a solid security program. Typically, how this works is you must work with an attorney to draft up a custom contract for every single engagement. Having a SOC 2 report eliminates the need to do this for every new engagement.

Additionally, it’s important to note that the vast majority of enterprise prospects will have their security review policies in place and want to see a SOC 2 report. Many may not even consider accepting a custom contract as an alternative in order to adhere to their standards.

When selling to smaller companies, they may not ask for a custom contract about your security measures. However, if you don’t have SOC 2, it will still take extra time, effort, and an extensive security questionnaire to build buy-in and convince them you are secure.

Without a SOC 2 report, companies are likely to have you fill out extensive security questionnaires as part of their risk assessment process. This process can be quite time-consuming, especially if you work with a lot of third-party vendors whose risk profiles must also be taken into account.

6. How Long Does It Take To Undergo a SOC 2 Audit?

How long a SOC 2 audit can take varies. The short answer is that it can take anywhere from three to twelve months. However, this time frame varies dramatically depending on your sector, the level of sensitivity of the data you handle, the size of your company, and other factors.

At Touchstone Security, we begin every SOC 2 engagement with a comprehensive gap assessment. From there, we develop a detailed roadmap to get you to where you need to be. Lastly, we will review your new, updated SOC 2-compliant program with you. At this point, we can also look into other frameworks you are now meeting many parts of already:

7. Is There Any Overlap Between SOC 2 and Other Standards or Compliance Requirements I Might Need?

Yes, a lot! For example, SOC 2 and HIPAA share a surprising amount of overlap in their controls. If you are working with a Managed Security Services Provider for your security needs, they will often even bundle these two together for you and get them both done at the same time.

After SOC 2 and HIPAA, it often makes sense to then look at other compliance requirements with overlap. GDPR often makes sense to look at next, as you will need it if your company offers services in the EU or processes EU citizens’ data.

Summary – Benefits of A SOC 2 Report

In conclusion, getting your SOC 2 report means you can sell more broadly and are equipped to meet customer requests regarding your security. Having a SOC 2 report has the added benefit of providing you with a convenient baseline of controls from which you can build to obtain compliance with requirements such as HIPAA and GDPR.

Why Choose Touchstone’s SOC 2 Compliance Services?

Touchstone Security is a veteran-owned, New Jersey Managed Security Services Provider based in Allendale. We focus on helping companies build world-class cybersecurity programs using the NIST Cybersecurity Framework. We have extensive experience working with clients ranging from the U.S. Army and Goldman Sachs to Walt Disney. Creating a highly effective cybersecurity program has never been more critical than it is now, and our experts are equipped with decades of experience and a proven track record of going above and beyond for our clients.

Get in touch with us today for a free 60-minute compliance evaluation with a senior-level CISO to learn more.