What is SOC 2 Compliance? Meaning and Requirements

Read about what are the requirements, audit process, and SOC 2 certification, and access a comprehensive SOC 2 compliance checklist so that your organization can achieve a SOC 2 certificate.

Definition

SOC 2 is a widely recognized auditing framework coming from the American Institute of Certified Public Accountants (AICPA) created to ensure that service providers, particularly those acting in the technology and cloud computing fields, manage customer data in a secure manner. SOC 2 compliance provides additional assurance that strong security controls are implemented to protect customer data.

SOC 2 certification can be thought of as a seal of approval showing that a company's data protection measures meet established industry standards. Many organizations adhere to SOC 2 so that they can differentiate themselves in a security-conscious market and build trust with their customers.

SOC 2 compliance code incorporates the criteria and controls that should be implemented for compliance, based on the Trust Services Criteria, including areas such as access controls, system monitoring, and risk management practices. There isn't a single, universal “code,” though - the SOC 2 framework is a broad set of guidelines that proves an organization is committed to data security and privacy.

What Does SOC 2 Stand For?

SOC 2 stands for Service Organization Control 2.

“Service Organization” refers to companies providing services to other organizations.

“Control” refers to the measures/safeguards these companies put in place to ensure data security and compliance.

The “2” is used to distinguish it from SOC 1 (focused on financial reporting), and SOC 3 (a simpler report intended for public use).

SOC 2 helps organizations demonstrate their commitment to data security, availability, and privacy.

The Five Trust Principles of SOC 2

SOC 2 compliance is built around the following Five Trust Principles:

1. Security: The Foundation of Trust: Protecting system resources from unauthorized access through controls like firewalls, encryption, and multi-factor authentication.

2. Availability: Ensuring Continuous Access: Ensuring systems are available for operation as promised, including disaster recovery planning and incident response.

3. Processing Integrity: Accuracy and Timeliness: Ensuring that data is processed completely, accurately, and in a timely manner as authorized.

4. Confidentiality: Limiting Access to Confidential Information: Ensuring data is protected from unauthorized disclosure or use.

5. Privacy: Respecting Customer Data: Protecting personal information according to regulatory requirements and the organization's privacy policies, including how it's collected, used, retained, disclosed, and disposed of.

A SOC 2 report, the result of a SOC 2 audit, details how an organization meets these principles through its internal controls and processes.

Key Components of SOC 2

At its heart, SOC 2 compliance is about meeting the Trust Services Criteria (TSC), which are: Security, Availability, Processing Integrity, Confidentiality, and Privacy. These are the foundation for SOC 2 audits that determine how well an organization protects its data and maintains operational integrity.

To be compliant, organizations must have three key components:

1. Policies on data security and management.

2. Procedures on executing policies and handling different scenarios.

3. Controls to prevent unauthorized access and maintain system availability and integrity. These include:

Technical: Firewalls, encryption, access management systems;
Administrative: Employee training and security awareness programs;
Physical: Secure data centers and restricted access areas.

The SOC compliance process extends beyond merely putting the components into place, as these need to be constantly monitored and enhanced. SOC 2 Type II reports assess the operational effectiveness of controls over six to twelve months.

The control environment encompasses management's overall attitude, awareness, and actions regarding controls. Risk assessment is another important component that involves identifying and managing risks. Monitoring activities define the process for ongoing evaluation of control effectiveness. Control activities consist of specific measures taken to address identified risks. Communication and Information defines the proper methodology for communicating important information to employees - including how risks, incidents, and control measures are managed.

The Importance and Benefits of SOC 2 Compliance

Organizations that attain SOC 2 compliance enjoy several notable benefits, and what this means is that they gain enhanced trust and reliability in their services.

1. Better Security: SOC 2 requires organizations to implement strong security controls such as access management, encryption, and incident response. These prevent unauthorized access, reduce vulnerabilities, and defend against attacks like ransomware.

2. More Customer Trust: SOC 2 compliance is a trust badge. Customers, especially those found in industries like finance, healthcare, and cloud services, will choose service providers that can prove their data is protected.

3. Competitive Advantage: SOC 2 compliance is a requirement for doing business in many industries. Some customers require their service providers to meet strict endpoint security standards, and being compliant can help organizations win contracts that would otherwise be out of reach.

4. Simplified Compliance: SOC 2 compliance overlaps partially with other frameworks like ISO 27001 and NIS2. Once it becomes compliant, an organization can also meet other regulations faster and with less effort.

5. Better Internal Processes: A SOC 2 compliant organization is required to document procedures. It also assesses risks on a regular basis and maintains ongoing monitoring. All these practices lead to better risk management and more efficient business operations.

In conclusion, why is SOC 2 compliance so important for business? The modern world is becoming increasingly more data-driven and compliance offers a clear path to projecting trust, reducing risk, and proving to everyone that an organization is really serious about data protection. It provides evidence that a company has invested in protecting its customers' data, which is essential for business success and longevity in a competitive market.

SOC in Action: Real-life Cybersecurity Scenarios

SOC 2 compliance sounds great in theory, but what exactly is its real-world impact? Let's go through some real-life examples:

1. Data Breach Prevention: A mid-sized financial services company implemented SOC 2 controls including regular security assessments and employee training. During an assessment, they found and patched a critical vulnerability in their customer portal that could have exposed thousands of customers' financial data.

2. Third-Party Risk Management: A healthcare technology startup won a major contract with a large hospital network due to its SOC 2 compliance. The hospital, bound by strict HIPAA regulations, required vendors to meet strict security standards. The startup's certification gave them the assurance needed to win the contract over non-compliant competitors.

3. Incident Response: An e-commerce platform discovered an attempted breach. That was possible because of their SOC 2 mandated monitoring. Thanks to their documented incident response procedures, they were able to contain the threat, minimize damage and communicate transparently with affected parties, and allow the organization to maintain customer trust.

4. Operational Efficiency: A cloud services provider simplified their operations while going through SOC 2 compliance. They benefited from the compliance process, which uncovered various internal inefficiencies that they were previously unaware of. Once they resolved these problems, they could offer better service to their customers, and also reduce their costs.

Who Needs a SOC 2 Report?

Reports are for service organizations that store, process, or transmit customer data:

1. Cloud Service Providers: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS) solutions providers manage client data in cloud environments and need to show strong security and privacy.
2. Data Centers: Facilities that host and manage critical data and applications for other businesses, often with highly sensitive information.
3. Managed Service Providers (MSPs): Companies that remotely manage IT infrastructure or user systems, often for clients with high security requirements.
4. Software Development Companies: Especially those that build applications handling sensitive customer data (financial or personal information).
5. Financial Technology (FinTech) Companies: Using technology to enhance or automate financial services means that there is a clear need to have robust data security for handling personal and financial data.

Some industries that need compliance more than others are: Healthcare - for patient data protection and HIPAA compliance; Finance - for sensitive financial information and customer trust; E-commerce - for customer payment information and personal data to prevent fraud; Legal Services - for client confidentiality, legal documents and communications; and Education - for student records and FERPA compliance.

Is SOC 2 Mandatory?

SOC 2 is technically not mandatory. It's a voluntary framework created by the American Institute of Certified Public Accountants (AICPA) to offer service organizations guidelines for data security. In practice, though, client contracts and industry expectations make it “not optional”. Let’s explore why this compliance is often considered necessary to stay competitive.

1. Client Requirements: Many large businesses, especially in highly regulated industries, require compliance from their service providers before they sign a contract.

2. Industry Standards: In finance and healthcare, SOC 2 is a security standard, so organizations can be trusted to handle sensitive data.

3. Regulatory Compliance: SOC 2 is not directly required by law, but this type of compliance helps businesses with broader legal frameworks (like GDPR, HIPAA, or CCPA) and makes it easier for them to meet strict data protection regulations.

4. Competitive Advantage: A compliant organization can use this status to differentiate itself, especially in industries that consider data security a priority. Clients who prioritize information security will surely consider this compliance an advantage.

5. Risk Management: SOC 2 compliance is part of a company’s risk management strategy, so they can be assured their data security controls are working and are being reviewed regularly.

Since it's so widely adopted, it's a practical requirement for businesses that handle sensitive data, especially those that want to be credible and meet industry expectations. Before deciding to invest in compliance, it is good practice for businesses to carefully consider both their needs and client requirements, so that they can decide if there is an opportunity in this process.

What are the SOC 2 Compliance Requirements?

To be compliant, you need to implement a combination of technical and procedural controls that address the five Trust Services Criteria (TSC):

1. Security: Implement access controls, firewalls, intrusion detection, and incident response.

2. Availability: Systems are operational and available as agreed, which includes disaster recovery and business continuity plans.

3. Processing Integrity: Data is processed accurately, completely, and on time with quality assurance and monitoring.

4. Confidentiality: Sensitive information is encrypted, access controlled, and data is disposed of securely.

5. Privacy: Follow your organization’s privacy notice and AICPA’s generally accepted privacy principles.

On top of these criteria:

Perform regular risk assessments to mitigate risks.

Document security, data access, and system change policies and procedures.

Train employees on best practices and the role of security in compliance.

Monitor systems for security incidents.

Manage vendors and third-party risks.

Implement change management for system changes.

Perform Internal audits to verify compliance and remediate gaps

SOC 2 Compliance Checklist and Key Takeaways

How do you get ready for compliance?

Start Early: Begin preparing well before your target compliance date.

Involve Stakeholders: Engage all relevant departments (IT to management) in the compliance process.

Invest in Tools: Use GRC (Governance, Risk, and Compliance) platforms to manage the compliance process.

Internal Audits: Regularly find and fix issues before the audit.

Stay Informed: Keep up to date with SOC 2 requirements and industry best practices.

You can use this checklist for guidance on the specifics of the process:

1. Scope: Determine which TSC apply to your systems and operations.

2. Gap Analysis: Assess your current controls against SOC 2 requirements to identify gaps.

3. Policies / Procedures: Your documentation should cover all criteria, and it should be up to date.

4. Controls: Implement technical and procedural controls (e.g., encryption, incident response).

5. Employee Training: Make sure all staff know their role in SOC 2 compliance.

6. Regular Risk Assessments: Continuously evaluate your organization’s security posture and remediate risks.

7. Monitoring and Logging: Your systems should do this on a continuous basis.

8. Audit Prep: Collect evidence that shows the effectiveness of your controls over time.

9. Auditor: Choose a CPA firm that has experience with SOC 2 audits and is qualified and authorized to conduct audits under AICPA’s attestation standards.

10. Remediation: Fix any issues that come up during the audit.

And remember:

Compliance is an ongoing process.

Building a security culture is key to long-term compliance.

Review and update controls regularly to stay ahead of threats.

Document everything – policies, procedures, incidents, and responses – to prove compliance.

Get leadership buy-in to get an organization-wide commitment.

Consider using compliance automation tools to make the process easier.

What is a SOC 2 Audit and What Does It Include?

A compliance audit is a full assessment of your systems and controls and the goal is to make sure that you meet the Trust Services Criteria (TSC) of the American Institute of Certified Public Accountants (AICPA).

The main goals of a SOC 2 audit are:

1. Testing the design and controls' operating effectiveness.

2. Verify compliance with the relevant Trust Services Criteria.

3. Give stakeholders assurance you have adequate data protection in place.

An audit will review your policies, procedures, and technologies such as: access management and encryption, disaster recovery plans, incident response and system monitoring, and data handling.

The two types of SOC 2 audits are:

Type I: Tests controls at a point in time.

Type II: Tests controls over a period of time, usually 6 to 12 months.

The SOC 2 Audit Process

1. Scoping: Determine which Trust Services Criteria apply and what systems, processes, and data to audit.

2. Planning: Create an audit plan, including timelines and resource allocation.

3. Assessment: The auditor reviews documentation, conducts interviews, tests controls, etc.

4. Evidence Collection: Gather and analyze evidence of control effectiveness, including system logs, reports, and monitoring data.

5. Reporting: The auditor writes a detailed report of the findings, including areas for remediation.

6. Review and Remediation: The organization can review and respond to the audit findings and address the gaps.

7. Final Report Issuance: A final report is issued stating whether the organization meets the SOC 2 compliance requirements.

For Type II audits, this includes ongoing monitoring to ensure controls remain effective during the audit period.

Who Can Perform a SOC 2 Audit?

These audits must be performed by licensed Certified Public Accountants (CPAs) or CPA firms accredited in information security and the AICPA's attestation standards. They are often referred to as "service auditors".

In addition to the CPA, audit firms may have IT professionals who help evaluate the technical aspects of the organization’s controls, such as system monitoring and data encryption, however the final report and validation must come from the CPA to ensure the audit is objective and credible.

A third-party professional assessment is used to build trust with clients, partners, and regulators who require SOC 2 reports in order to verify that you meet industry security requirements. This can provide a full and objective review of your data protection practices so stakeholders are confident in your services.

SOC 2 Type 2 vs SOC 2 Type 1: What is the Difference?

Both Type 1 and Type 2 evaluate compliance with the Trust Services Criteria (TSC) - however, scope, duration, and purpose are not the same.

It is generally considered that Type 1 is a good starting point for new organizations to show control design. Type 2 is better for organizations with mature security programs. A Type 2 report is a full audit of an organization’s internal controls over a specific period of time (usually 6 to 12 months). It looks at not only the design of the controls but also how they operate over time. Type 2 gives clients and stakeholders more assurance, showing that an organization’s security controls are working consistently and effectively during the audit period.

Aspect	SOC 2 Type 1	SOC 2 Type 2
Scope	Assesses the design of controls	Evaluates the design and the controls' operational effectiveness
Time Frame	Single point in time (snapshot)	Typically, 6 to 12 months
Focus	Design suitability of controls	Design suitability and operating effectiveness of controls
Comprehensiveness	Reduced	Rigorous
Evidence Collection	Limited to design review	Extensive testing and evidence gathering over time
Confidence Level	Moderate	Reduced
Typical Use Cases	Initial compliance efforts, newer organizations	Established security programs, organizations requiring long-term assurance
Client Preference	Less preferred by clients	More preferred due to the higher level of assurance

Main differences:

1. Time Frame: Type 1 is a point-in-time assessment, a snapshot of the organization’s control design at a specific point. Type 2 is over a longer period, usually 6 to 12 months.

2. Depth of Evaluation: Type 1 looks at whether the controls are designed correctly, Type 2 looks at how the controls operate over time and is more in-depth.

3. Evidence Requirements: Type 2 requires more evidence collection and continuous testing, Type 1 requires less evidence- just a single point in time.

4. Assurance Level: Type 2 gives higher assurance because it confirms the controls are working effectively over a period of time, making it the preferred choice for clients who need operational assurance.

SOC 1 vs SOC 2 vs SOC 3

The Service Organization Control (SOC) framework has three types of reports and each is designed for a different purpose, audience, and scope:

Aspect	SOC 1	SOC 2	SOC 3
Focus	Financial reporting controls	Security, availability, processing integrity, confidentiality, and privacy	Same as SOC 2 but summarized
Primary Audience	User entities and auditors	Management, regulators, business partners, and customers	General public
Detail Level	Detailed	Highly detailed	High-level summary
Scope	Financial controls	IT and data security controls	Same as SOC 2 but less detailed
Distribution	Restricted	Restricted	Unrestricted
Typical Users	Financial service providers	Technology companies, cloud service providers, data centers	Public marketing or assurance purposes

SOC 1 (which stands for Service Organization Control 1) is about an organization's internal controls over financial reporting. It ensures financial information is secure and accurate. It's critical for service organizations like payroll processors or loan servicing companies. SOC 1 looks at how a service organization's internal controls impact its clients' financial reporting. Primarily used by organizations whose services impact their clients' financial audits.

SOC 2 is broader in scope. It's about the Trust Services Criteria: security, availability, processing integrity, confidentiality, and privacy. It's mostly used by technology and cloud service providers to prove they protect sensitive data and have strong IT security controls.

The main differences between SOC 2 and SOC 3 are the level of detail, audience, and distribution. SOC 2 provides a detailed evaluation of a service organization's systems and controls, for management, regulators and business partners who need deep information. These reports are restricted and shared only under NDA (non-disclosure agreement). SOC 3 provides a summary of the same information for the general public. SOC 3 reports are publicly available and often used for marketing or public assurance purposes.

Note the difference between SOC Type 2 and SOC 3: SOC 1 and 2 reports are a detailed audit that evaluates the operating effectiveness of controls over a period of time (usually 6 to 12 months). SOC 3 is a high-level summary of SOC 2. It is a public facing document that demonstrates that an organization meets security standards without revealing the audit details.

Common Challenges in SOC 2 Compliance

SOC 2 compliance can be considered a complex and time-consuming project by most organizations that are only starting out. There are certain common challenges and below are some best practices on how to overcome them:

1. Scope: Many organizations struggle to determine which Trust Services Criteria to apply and which systems to include in the audit. Do a risk assessment early on and talk to stakeholders to align the scope with business objectives and customer requirements.

2. Resources: SOC 2 requires a lot of time, budget and personnel. Prioritize the critical areas of compliance and consider using automation tools. Engage external consultants with SOC 2 expertise to help with resource constraints.

3. Documentation and Policy: Keeping comprehensive, up-to-date documentation of security controls, policies, and procedures can be challenging. Implement a centralized document management system with regular review cycles to keep everything current and aligned.

4. Continuous Monitoring and Control Testing: For SOC 2 Type 2, organizations must demonstrate ongoing control effectiveness. Use automated monitoring tools and conduct regular internal audits to identify and resolve issues before the formal audit.

5. Employee Training and Awareness: Getting all staff to understand their part in maintaining compliance can be tough. Develop a security awareness program with role-specific training to keep employees informed of their responsibilities.

6. Third-Party Risk: Assessing and monitoring the security practices of vendors and partners is critical but often hard. Implement a vendor management program that includes regular assessments and contractual requirements for SOC 2.

Achieving SOC 2 Compliance with Bitdefender

As a SOC 2 Type 2 compliant company, Bitdefender understands the strict requirements and provides tools suitable for all five Trust Principles: Security, Availability, Confidentiality, Processing Integrity, and Privacy.

GravityZone Business Security Enterprise offers a single platform for preventing, detecting, and responding to threats across endpoints, networks, and cloud environments. Through advanced threat protection capabilities, it supports the Security and Availability principles - protecting against unauthorized access and ensuring system uptime.

For organizations dealing with sensitive customer data, GravityZone Full Disk Encryption maintains data confidentiality through strong encryption management, aligning with the Confidentiality principle and helping to protect personally identifiable information (PII).

GravityZone Integrity Monitoring can prevent unauthorized changes to systems and files, ensuring their integrity is not compromised.

GravityZone Patch Management automates patching, addressing vulnerabilities promptly and supporting the Security principle by keeping systems up to date. Combined with GravityZone Risk Analytics, organizations can continuously monitor their security posture. They can identify and mitigate technical vulnerabilities and risky user behaviors, which is vital for maintaining Processing Integrity and Privacy.

To meet strict monitoring and reporting requirements, GravityZone's centralized management console offers broad visibility and control. This facilitates audits and simplifies SOC 2 reporting.

Bitdefender offers advanced detection and protection solutions like Endpoint Detection and Response (EDR), Extended Detection and Response (XDR), and Managed Detection and Response (MDR). GravityZone EDR and GravityZone XDR provide comprehensive detection and response capabilities across multiple layers, from endpoints to networks, and cloud environments, aligning with the Security and Processing Integrity principles of SOC 2. Bitdefender MDR enhances these capabilities by offering 24/7 monitoring through global Security Operations Centers (SOCs), where expert analysts detect, analyze, and respond to both internal and external threats.

GravityZone CSPM+ can review your cloud risks, identify cloud threats, and provide compliance mapping for various standards, including SOC 2.

Overview

Definition
Components
Importance
Requirements
Types
Challenges

Solutions

Frequently Asked Questions

Are there alternatives to SOC 2?

There indeed are various alternatives to SOC 2. ISO 27001 is a popular standard for building secure systems. It is more rigid and has detailed guidelines. PCI DSS (Payment Card Industry Data Security Standard) is considered vital for businesses that handle credit card data. HIPAA (Health Insurance Portability and Accountability Act) is followed by healthcare organizations in order to protect personal health information, while NIST (National Institute of Standards and Technology) Cybersecurity Framework is used especially by U.S. organizations.

Is it SOC or SOX compliance?

Often confused, SOC (Service Organization Control) and SOX (Sarbanes-Oxley Act) compliance are not the same. The first one is focused on protecting IT systems and data security - it ensures safe management of customer information. SOX is about financial reporting. It was introduced to stop financial fraud and helps define financial controls and transparency of publicly traded companies.

What is the difference between ISO 27001 and SOC 2?

ISO 27001 is an international standard providing a prescriptive framework for creating an Information Security Management System (ISMS). The main difference is in their approach to security. The first one tells companies exactly what steps to follow to protect their data, including specific policies and risk assessments. SOC 2 is more flexible and allows companies to choose how they want to secure their systems based on broad guidelines. ISO 27001 is often used worldwide and is suitable for any company, while SOC 2 is commonly used by service providers to show clients their data is safe.

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Please be advised that it is entirely your responsibility to check your compliance with any piece of legislation, including SOC2, and by presenting the above information Bitdefender expressly disclaims any and all liability regarding your compliance with SOC2 and your conduct in relation to SOC2 or any other legal requirements you may be subjected to. For the avoidance of any doubt, by using Bitdefender Solutions, including GravityZone, Bitdefender does not warrant in any way your compliance to any piece of legislation, including SOC2. The above does not represent legal guidance and you are encouraged to seek legal advice with respect to the above or any other legal related topic.