A guide in SOC 2 compliance for startups
Secure business operations on digital platforms bring a unique set of challenges to compliance for managers. Startups now have to seek SOC 2 compliance just like other traditional businesses.
Considering this emerging requirement, managers need knowledge on how to approach SOC 2 compliance procedures. This guide enlightens you on the main issues for focus in the complex SOC 2 compliance field.
Debunking SOC 2 Compliance
The digitalisation of data has seen a consistent increase in companies that rely on digital files in their operations. This development brings with it the dark reality of data breaches due to exposure. In 2019, data breaches exposed over 164 million records of sensitive data in the US arising from 1,473 recorded incidents.
Such breaches have far-reaching implications like identity theft and phishing for clients who fall victim. For businesses, it attracts punitive lawsuits and even closure of organisations.
The American Institute of Certified Public Accountants (AICPA) has a set of standards called SOC 2 that require adherence by organisations to secure privacy and information. AICPA audits organisation to confirm compliance with cybersecurity guidelines. Any organisation with SOC 2 compliance certification earns the trust of its clients as it assures them of safe handling and storage of their data.
Time Required to Acquire SOC 2 Compliance
The duration of completing the SOC 2 compliance process is not definite since organisations vary depending on their needs and scale of operations as defined in factors like:
Sensitivity of data
Number of branches of the organisation
Other factors include the number of employees and the number of systems involved in an organisation’s operations. Your commitment also depends on growth goals for your company in view of when you intend to start attracting bigger clients.
The drafting stage of the compliance process may take between two weeks and a month. This is where you familiarise yourself with compliance requirements and gather all relevant documentation in anticipation of vetting by the auditors.
This is a Type 1 audit where you meet the requirements of the vetting. If your organisation requires Trust Services Criteria vetting or you failed the Type 1 audit, you go for type 2 auditing which requires extra documentation. Type 2 audit takes close to a year to complete.
Costs Involved in SOC 2 Compliance Vetting
The budgetary implications of SOC 2 compliance depend on the nature of a provider that you seek for the service. Big names in the business charge premium rates for the service. Other factors target the type and scope of audit required depending on whether your organisation needs Type 1 or Type 2 SOC audit.
If your company has never conducted this audit, it might cost you more because of the lack of or inadequacy of necessary control documentation. The complexity and number of procedures you require will affect the cost of the audit.
Fortunately, the high costs only appear if the audit is happening for the first time. Subsequent audits cost less. There are other additional expenses in the process such as legal fees and costs of a readiness assessment. Consider too that you will need to restructure your staff by assigning an employee to the process or hiring a consultant.
Your company will adopt new operations because of the compliance requirements. You will need to factor in training and technical work involved for your employees due to those changes. A SOC 2 compliance report has a one-year validity after which you need another audit.
Your Role in SOC 2 Compliance Vetting Preparations
The exact time to start the compliance process depends on its position in the priority list of your organisation’s strategic plan. However, you should start working on the process from the initial stages of setting up the organisation. This is because compliance is a culture built on policies that you should instill in all the members of your company to streamline operations.
Your SOC 2 compliance consultant will carry out most of the process. You, however, have a duty to convene a team to work with the vendor in performing manual documentation or writing. The success of your vetting also requires you to conduct a gap analysis. This will help you to identify any shortcomings in your data handling operations and correcting them before the vetting.
After the vetting, the auditor gives you a SOC 2 audit report. The document details your company’s controls and security status for evaluation by other auditors and data security experts.
Acquire SOC 2 Compliance Today
SOC 2 compliance keeps your company secure in the midst of business ending impacts of cybercrime. The compliance also gives you an edge over the competition as clients wish to confirm your SOC 2 compliance status before giving you a contract. Contact a reputable provider to ensure the successful completion of your SOC 2 compliance objective.