Factors Affecting SOC 2 Audit Cost

What Factors Affect SOC 2 Audit Cost

There is no single SOC audit cost size that fits all organizations. The cost of a SOC 2 audit varies depending on several factors, including the size of the company and the extent of the scheduled SOC 2 audit. 

Companies are expected to understand what affects a SOC 2 audit’s final cost and know which steps to invest in. Some companies will have more limited options, thereby only focusing on more limited criteria. Understanding these factors will help you optimize the audit process. 

Factors that affect the final SOC 2 audit cost include: 

Size and Complexity of Your Organization

The larger and more complex your organization, the higher your SOC 2 audit costs. Large organizations have more internal control policies and sensitive data to audit, which automatically equates to more complex SOC 2 controls. In addition, the more physical security barriers to review, the more extensive the audit will be.

Type of SOC 2 Audit

The cost of a SOC 2 audit is significantly influenced by whether it is a Type 1 or Type 2 audit. Type 1 audits are less expensive because they only assess the design of controls at a specific point in time. 

In contrast, Type 2 audits are more comprehensive and costly, as they evaluate the operating effectiveness of controls over a period of 3 to 12 months, often making them 30-50% more expensive than Type 1 audits due to the additional testing involved.

Scope of the Audit

The scope of the audit refers to the specific trust services principles on which you are being audited. Suppose your organization is being audited on all five trust services principles (security, availability, processing integrity, confidentiality, and privacy). 

In that case, you will automatically be looking at a very high SOC 2 audit cost than if you are only being audited on one or two principles.

Experience of the auditor 

More experienced auditors will typically charge higher fees. However, it is essential to note that experience is important when choosing a SOC 2 auditor. 

You should select an auditor who has experience auditing organizations in your industry and a good reputation. If you’re using your SOC 2 report to close deals, the importance of your auditor will influence your customer’s confidence in your data security.

Industry Type

Some industries are more regulated than others, and organizations in these industries may have higher SOC 2 audit costs. This is because they may need to implement more complex controls to meet regulatory requirements.

Geographic Location 

The cost of SOC 2 audits varies by geographic location. For instance, SOC 2 audits in major metropolitan areas may be more expensive than SOC 2 audits in rural areas.

Your chosen auditing firm will explain these factors to you. Understanding them can help you decide on the audit’s course, including the decision of whether to take a Type 1 or Type 2 SOC 2 audit. 

How Much Does a SOC 2 Audit Cost?

The total cost of a SOC 2 audit, including any extra expenses, can range from $15,000 to over $200,000 in the first year. Several factors can affect the total SOC 2 audit cost, including the size of the operations and the focus Trust Services Criteria. 

Note that these values include generally essential additional costs, such as SOC 2 preparedness tests, other preliminary steps, and around any Trust Services Criteria.

What Are You Paying for in a SOC 2 Audit?

SOC 2 audits require a lot of financial resources, and misusing these resources can put your company at risk. Understanding the cost of the SOC 2 audit components can help you ensure that you are allocating your resources appropriately. 

Below are some general estimations of the core expenses for a SOC 2 audit.

Audit Firm Fees 

The most significant cost is usually the fees charged by a certified public accounting (CPA) firm that specializes in SOC 2 audits. SOC 2 audits must be performed by a CPA firm that has been certified by AICPA. 

The audit fees can vary widely based on the reputation of the SOC 2 audit firm you choose to use, their experience, and the scope of the audit. Higher-priced auditors are more likely to have the experience and expertise necessary to produce a high-quality SOC 2 report.

Remediation Cost 

The remediation cost is fixing any deficiencies the auditor finds in the organization’s controls. The severity of the deficiencies will affect the cost of remediation.

Additional Costs of a SOC 2 Audit

In addition to the main audit costs from an auditing firm, there may be some additional costs that a company will have to avail to ensure the success of the audit. Some of these additional costs will come from readiness assessments and supporting processes that all aim to fully equip your company with the necessary security tools to pass a SOC 2 audit. 

Below are some essential additional steps and costs to pass a SOC 2 audit.

• Readiness Assessment. A readiness assessment is a preliminary assessment of your organization’s security posture. Although very helpful, a readiness assessment is an optional step for a SOC 2 audit. An independent auditor you hire performs an audit to identify any gaps or weaknesses in your organization’s controls. The assessment aims to help you prepare for a SOC 2 audit and comply with the SOC 2 trust services criteria (TSCs).
• Compliance Preparation and Consultation Fees. Your internal staff must dedicate time to prepare for the audit, including documentation, data protection policies, and control implementation. You can hire consultants or third-party experts to assist with SOC 2 preparation. These services come with their costs.
• Legal fees and Insurance Costs. Consider consulting legal experts to ensure compliance with privacy and security regulations. Cybersecurity insurance can also be a cost, providing financial protection in case of a customer data breach.
• Software and New Tools. You will need specialized software to help manage and track your compliance efforts. This could include GRC (Governance, Risk, and Compliance) software.  
• Regular Security Awareness Training. Ensure all staff members understand and follow security policies and internal controls. You also need to consider the costs associated with training materials, courses, and awareness campaigns should be considered.
• Security Improvements. If your organization identifies gaps in its security controls or policies during the SOC 2 preparation, you may need to invest in additional security tools. This could include upgrading IT infrastructure, implementing new security measures, or enhancing employee training.
• Other Ongoing Maintenance Costs. After obtaining your SOC 2 report, there are ongoing costs to maintain compliance, such as annual audits and continuous monitoring.

This breakdown does not include the actual cost of time your employees spend on preparation and the cost of lost productivity. Other hidden costs may be essential to get a complete, comprehensive, and effective SOC 2 audit. 

The key to a transparent and effective SOC 2 audit is to hire professionals and experts. Contact IS Partners today and consult with our SOC 2 audit experts. Our team specializes in providing service organizations with comprehensive cybersecurity audits and helps improve your security controls in the most efficient way possible.

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Potential Implication of Low-Cost SOC 2 Audits

As the AICPA consistently focuses on the importance of SOC 2 audits in securing sensitive information, more auditors specialize in this type of audit. This trend led to the dilution of expertise in the field and rampant price competition for SOC 2 audits. 

Unfortunately, the industry is seeing more suspicious offers that promise comprehensive SOC 2 audit results in a very short time. The pressure from competition forces some companies to sacrifice audit quality to win more business.

Some firms are promoting SOC 2 audits that can be completed in as little as two weeks for very low fees, which is a red flag that the audit may lack sufficient depth and rigor. 

Suspiciously low-cost audits can imply several scenarios affecting the audit’s outcome. Some of them may include:

1. Reduced quality of outcome from cutting corners. 
2. Reliance on generic checklists, compared to tailored testing. 
3. Inexperienced audit staff conducting the evaluations. 
4. False sense of security through incomplete controls. 
5. Lack of credibility.
6. User entity auditors questioning your company’s generic checkbox controls leading to additional client audits or total loss of client.

While low-cost audits that promise great results sound enticing, especially for smaller businesses, these promises may sometimes be too good to be true. Companies must always practice being cautious when selecting a partner auditing firm. 

At IS Partners, we do not believe in cutting corners. Our team of expert CPAs are trained and seasoned for decades in the art of conducting critical evaluations, such as SOC 2 audits. 

IS Partners provides justified pricing with a promise of a comprehensive result and effective solutions to your cybersecurity needs. Contact us today and talk to our SOC 2 expert to learn more. 

How to Reduce the Cost of a SOC 2 Audit

Companies can reduce the cost of SOC 2 audits through solid preparation and knowing which criteria to focus on. These main steps can help you optimize your financial resources and only invest in the essential parts of the audit. 

Here are a few smart ways to reduce your SOC 2 compliance costs.

1. Start planning early. The earlier you start planning for your audit, the more time you’ll have to prepare and get your systems and documentation in order. This will help to reduce the amount of time the auditor spends on your audit, which can save you money.
2. Identify and remediate any deficiencies in your controls before the audit. The auditor will look for weaknesses in your security, availability, processing integrity, confidentiality, and privacy controls. If they find any deficiencies, you’ll need to remediate them before you can pass the audit. This can be a time-consuming and expensive process, so it’s best to identify and fix any problems before the audit begins.
3. Hire an experienced auditor. An experienced auditor will be able to quickly identify any potential problems with your controls and help you to remediate them. They will also be able to help you prepare for the audit and avoid any surprises.
4. Consider hiring a consultant. A consultant can help you to prepare for and implement SOC 2 compliance. That can save you time and money, and it can also help you avoid making any mistakes that could lead to findings in the audit report.
5. Be responsive to the auditor’s findings. If the auditor finds any deficiencies in your controls, be sure to remediate them promptly. This will show the auditor that you are committed to security and compliance, and it will help to reduce the cost of the audit.
6. Choose the right scope for your audit. Not all organizations must be audited on all five SOC 2 trust services principles. Consult with your professional auditor about which criteria your organization has to focus on and create a gap analysis to help you focus your financial resources. 
7. Use automation to help with your audit preparation. There are several tools available that can help you automate tasks, such as gathering evidence and testing controls. That can save you time and money. However, using automation for SOC 2 comes with risks and separate investments. Ensure you understand the objective and uses of software before committing to it. Communicate with cloud service providers to ensure the security of information.
8. Outsource non-core tasks to a third-party company. If you have the resources, consider outsourcing non-core tasks such as documentation and remediation to a third-party provider. This can free up your internal staff to focus on more critical tasks.

Make the Most out of Your SOC 2 Audit Cost by Trusting IS Partners

Understanding the factors that drive SOC 2 audit costs—from audit type and company size to industry-specific criteria and auditor experience—empowers organizations to allocate resources effectively. Knowing these elements helps you avoid unnecessary expenses and prioritize critical steps, ensuring a quality audit that protects your organization’s data integrity without overspending.

IS Partners offers over 25 years of expertise in SOC 2 compliance, guiding organizations to manage costs while maintaining rigorous audit standards. Our team works closely with clients to pinpoint cost-saving opportunities, streamline preparations, and incorporate useful automation tools, all while ensuring a high-caliber, compliant result.

Connect with IS Partners to discuss your specific needs and discover cost-effective solutions for achieving SOC 2 compliance.

About The Author

Joe Ciancimino

Joe is a Director in the IS Partners SOC practice. He is a Certified Information Systems Auditor (CISA) and Certified in Risk and Information Systems Controls (CRISC) practitioner and a member of the ISACA Philadelphia Chapter. Joe has been performing IT audit and attestation services for the last 6 years and continues to assist clients in performing a variety of engagements. These include System & Organization Controls (SOC) Reports (SOC 1/SOC 2), Information Technology and Information Systems Audits, IT General Controls / IT Application Controls Testing, ISO/IEC 27001:2013 Internal Audit/Compliance, Internal Audits on a outsourced/co-sourced basis