10 Steps to Prepare for a SOC 2 Audit (+Compliance Checklist)

The Importance of SOC 2 Audit Preparation

SOC 2 audits and audit reports serve as attestations to the security posture of service providers for their customers. A SOC 2 report shows customers and other stakeholders that all relevant systems are properly protected against the threat of modification or unauthorized access.

The compliance management process allows service organizations to address vulnerabilities and inconsistencies that might make their systems more vulnerable to cybersecurity attacks. 

Establishing the SOC 2 security framework not only prevents security incidents but also allows interrupted business continuity and improved competitive advantage.

Business leaders should be protective about how they save and share their intellectual property, human resource information, and confidential customer data. No matter how much vetting a client company does to find a service organization with incomparably impressive credentials, business leaders still have a duty to protect all data that is collected, stored, transmitted, processed, and disposed of by a service provider. 

10 Steps on How to Prepare for a SOC 2 Audit

The SOC 2 compliance process starts long before the audit date. Data security and compliance management are meant to be ongoing efforts.

They begin by analyzing the risk environment and identifying gaps, transition into remediation and readiness testing before auditing and certifying, and then start over again the next year.

Here’s a closer look at each phase. 

Step 1 | Identify Your Objectives and Purpose of Pursuing SOC 2

SOC 2 is a voluntary framework. This means that it is the management’s discretion whether to undergo an audit for it or not. As such, service organizations must clearly identify the goal of this process and determine who will benefit the most from it. 

In preparation, organizations must align their SOC 2 objectives with their business goals, including improving security posture, protecting sensitive information, and gaining recognition from international markets. 

The preparation phase of SOC 2 compliance begins with quantifying the business revenue that is at risk. Several methodologies can be used to quantify your financial risk accurately. During the kickoff, you and your audit partner will also establish the most critical preparation tasks and set expectations for the rest of your audit prep. 

Step 2 | Determine the Type of SOC 2 Report

Choose between SOC 2 Type 1 and SOC 2 Type 2 reports; this decision depends on your client’s needs, your organization’s services and products, or audit requirements. 

There are several considerations when choosing between the two types of SOC 2 audits. Consider business needs, customer requirements, and the stage of your compliance journey.

Step 3 | Define the Scope and Select the Appropriate Trust Services Criteria

Depending on the reason for the SOC 2 audit, the audit scope may cover the controls and security practices in one or all five of the Trust Service Criteria (TSC), of which security is a must. Additionally, the scope may be wider or narrower in relation to what will need to be analyzed. 

Consider any legal, contractual, or other regulatory obligations you may have to help identify specific TSC requirements. For example, healthcare organizations may focus on data privacy, as protecting patient data is crucial for them. 

In general, security and availability are the most commonly tested TSCs. 

Step 4 | Build a Strong Compliance Team 

SOC 2 audit is a marathon, not a sprint. The process can take several months. However, it will go more smoothly and efficiently if you identify the necessary roles and the people who will fill them. 

Essential SOC 2 players include: 

• Executive Sponsor – This person should be able to tell those in the C-Suite why SOC 2 certification is right for your organization. They can relate certification to ongoing security concerns, future revenue, risk management, and more. In a complex organization, this sponsor must do extensive research to be sure they thoroughly understand the undertaking.
• Project Manager – The project manager will coordinate all SOC 2 activities and team members while facilitating change management. They will gather information and documents, schedule resources, set deadlines and milestones, and help ensure everyone has what they need. A project manager needs to understand team management and the skills to keep everything moving. 
• Primary Author—The person in this role will need technical writing experience and extensive communication skills. They will also need a firm understanding of business and operations so that they can effectively interview members of other teams and clearly report on their work.
• IT and Security Personnel – The people on this team will have a great deal of material that needs to be created and verified during the audit process. Much of the work will demonstrate that your organization can detect and effectively respond to data security issues. 
• Third-party Consultants – Certified Public Accountants with experience with SOC 2 audits can significantly help streamline the audit process for your team.

Organizations like I.S. Partners can advise you throughout the process to ensure your success. Consultants understand the necessities of your company’s security controls. We can guide you in selecting the appropriate TSCs and help you understand how they apply to your organization.

Additionally, if you are bound by other compliance requirements, such as HIPAA and PCI, we can ensure that they are properly incorporated into your organization’s SOC 2. 

A critical advantage of hiring professionals to help you prepare for your SOC 2 readiness is that we can help you optimize the process. Optimization can include mapping an efficient path to opening compliance with other frameworks. 

Step 5 | Collect All Relevant Documents to the Audit

In preparation for the upcoming SOC audit, you’ll receive a list of all the documentation you will be expected to deliver as part of the process. 

This list will also highlight what you are currently missing. Most enterprises go into the process with a number of gaps. Giving yourself time to address them will ensure a higher level of success. Some of the most common gaps include: 

• A full asset inventory, as well as the process that keeps your inventory updated and accurate.
• Human resources documentation that includes procedures for evaluating employee performance, as well as a meta-document that outlines how and when these evaluations are distributed to the applicable managers.
• Controls and checklists for employee onboarding.
• A formal process for employee termination or change from one position in the company to another.
• Core policies, including standard operating procedures and an information security policy.
• Key security controls for your customer data.

Step 6 | Conduct a Risk Assessment

With the information from the previous steps, you can conduct a risk assessment. The goal of this step is to identify the potential impact of a vulnerability once sensitive data is exposed to data breaches. 

List all systems, data, operations, and controls that will be evaluated. The list must include which teams are responsible for each item. 

The SOC 2 audit team must identify all critical vulnerabilities in each step, determine the likelihood of a breach, and categorize the impact of breaches. This step can involve a qualitative and quantitative analysis of the consequences of a risk event, such as data breaches, financial losses, reputational damage, and legal implications, along with estimating the probability of these risks occurring based on historical data and expert judgment. 

A risk matrix can be used to categorize and prioritize these risks, helping to focus efforts on the most critical areas needing risk mitigation.

Step 7 | Perform a Gap Analysis

Gap analysis, or gap assessment, allows you to verify that all key controls are documented and in place. This process requires a close review of your chosen system against the criteria selected. 

A gap analysis serves to detect issues before beginning an audit. It allows your organization to make corrections, so be sure to leave plenty of time for remediation. 

Under this step, your team must determine all relevant SOC 2 controls already existing, identify missing controls, and assign ownership for gap remediation. 

Common issues often identified in this phase include: 

• A need for core policies that define how your organization protects internal and customer data.
• A need for consistent employee background checks.
• A need to adjust or create employment agreements that emphasize security needs.
• A need for a strong password policy that meets the latest best practice recommendations.

The gap analysis stage typically takes between two to four weeks. These days, all or nearly all SOC fieldwork and auditing procedures can be performed remotely without on-site appointments. 

At the end of this analysis, you and your auditor will have identified the controls that need improvement to achieve SOC 2 compliance. 

Step 8 | Perform a Readiness Assessment

Perform an internal self-assessment to determine any issues and non-compliance currently present. This step can be performed with the assistance of an external auditor who is knowledgeable about SOC 2 for your industry. 

This important exercise helps IT teams understand which important control environment elements require attention and remediation before performing the official audit. Even with all the other preparatory steps locked into place, conducting readiness testing is crucial for ensuring the service organization’s controls work as intended. 

It is not at all unusual for various inconsistencies, deficiencies, and other problems to surface during a SOC 2 readiness assessment. 

Readiness testing can also help narrow the scope down to the exact business processes and systems to be included in the audit. This is key to saving valuable time and resources. 

There really is no official industry standard when it comes to SOC readiness testing methods, but there are some core elements, points, and ideas that may help get service organizations like your own moving in the right direction, like the following: 

1. Make sure SOC is right for your business.
2. Choose and meet with a service auditor to discuss issues and concerns for an upcoming audit.
3. Select SOC 2 audit elements, such as the system in question and the TSC, or TSCs, to include in the audit.
4. List management commitments.
5. Evaluate controls and gaps to make sure they are in place, correctly designed, and operating effectively.
6. Remediate discovered gaps regarding controls, policies, procedures, and processes.
7. Develop a system description that reflects elements of the system, as well as criteria, security controls, and assertions.
8. Run and maintain processes to build an effective audit period.
9. Prepare to run your official SOC 2 audit with last-minute walk-throughs.

Step 9 | Conduct the Remediation Process

The goal of this step is to bridge all gaps and resolve all issues identified from the gap analysis and readiness assessment. In the remediation process, your control environment will be further aligned according to the SOC 2 requirements. 

This is the part of the process where teams will feel the impact of the changes that SOC 2 requires. You may also change your software development process to align with security needs. This step can last anywhere from two to nine months. The length of remediation will depend on what you discover during the gap analysis and what resources are available to seal up the gaps. 

Following the SOC 2 readiness assessment, your team should ensure all security procedures are exhaustively assessed and documented to facilitate the audit process and provide employees with a guideline for permissible actions on the audited systems. 

You will receive a request list from the SOC auditor regarding the documentation and gaps to be addressed.

After this remediation period, another assessment will be performed to check if gaps and issues were addressed. Once ready, you will select a third-party auditor from an audit firm to evaluate and attest your SOC 2 compliance. 

Contact I.S. Partners for a hassle-free SOC 2 audit!

Step 10 | Establish a Continuous Monitoring Program

For it to be effective, continuous monitoring must be practiced. By systematically establishing and maintaining a continuous monitoring program, organizations can ensure that their security controls remain effective, detect and respond to incidents promptly, and sustain SOC 2 compliance over time.

An effective monitoring program will require regular information logging and consistent analysis of patterns and potential anomalies. In this case, companies can seek the help of software providers and establish vulnerability scanners. 

Some of the key elements of a continuous monitoring program are having a feedback loop on control updates and a comprehensive documentation system. These elements will help ensure that your controls are adequately maintained and recorded. 

Thorough SOC reports from your monitoring program can streamline the next round of SOC 2 audits.

What Is a SOC 2 Compliance Checklist? 

A SOC 2 compliance checklist is a list of actionable items made to help organizations as they prepare for a SOC 2 readiness assessment or SOC 2 compliance audit. SOC 2 compliance checklist outlines the key steps an organization needs to follow to become compliant with the SOC framework. It helps ensure that a company’s information security measures are in line with the unique needs and requirements of today’s cloud environments, adhering to the five TSCs.  

While the actual checklist can differ for each organization depending on their unique operational structure and processes, a general SOC 2 compliance checklist can be downloaded here: 

Tips to Ensure Success When Preparing for a SOC 2 Audit 

A SOC 2 audit will always differ from one industry to another. Control requirements will depend on your operations. Despite this, compliance with the framework can be streamlined by employing some useful practices.

1. Establish Administrative Policies. Create strategies that match your team structure to manage security in the workplace. Regularly review and update these policies as procedures change. 
2. Implement Controls. Use available security tools and adopt best practices for efficient access control, firewall, and network protections by enabling encryption. Implement cloud security controls that match your policies regarding access control, networking, backup protocol, and more.
3. Engage a Reputable CPA Firm. Look for a firm that has worked with similar-sized companies, has experience in SOC 2 audits, and conducts an efficient auditing process.
4. Schedule the Audit. Find an accredited auditing partner meeting your organization’s needs and expectations to ensure a smooth and efficient process.
5. Cultivate a Culture of Security. Treat SOC 2 compliance as an ongoing program, not a one-time event. Foster security awareness through regular employee training. Conduct recurring security tasks like access reviews, vulnerability scans, and incident response tests.

I.S. Partners is at the forefront of conducting SOC 2 audits and ensuring critical compliance. Allow our U.S.-based team to help you perform all the essential tasks for a SOC 2 audit – from readiness assessments to the actual audit process.

What Is Included in the SOC 2 Requirements List?

A SOC 2 audit looks at how an organization’s data management to ensure it complies with the five Trust Service Criteria: 

1. Security: This assesses whether the system is protected, both physically and logically, against unauthorized access, disclosure, and disruption of system operations, among other security threats.
2. Availability: This criterion examines whether the system is available for operation and use as agreed upon. It includes network and system performance monitoring, disaster recovery, and incident handling.
3. Processing Integrity: This is about whether the system achieves its purpose. i.e., the delivery of the right data at the right price at the right time. It includes data processing, data quality monitoring, and process mapping.
4. Confidentiality: This checks whether confidential information is protected. It includes encryption, network and application firewalls, and access controls.
5. Privacy: This considers whether personally identifiable information is collected, stored, processed, disclosed, and disposed of in compliance with an organization’s privacy notice and principles and with criteria set forth in the Generally Accepted Privacy Principles issued by the AICPA.

The SOC 2 audit tests the design and operational effectiveness of controls the company has in place to meet the trust principles.

The purpose of the SOC 2 audit is to reassure the management and customers that the organization is responsible for data management, utilizing IT systems and software development processes correctly, and handling information responsibly, inline with the trust principles. 

What Documentation Should Be Collected Before a SOC 2 Audit? 

SOC 2 documentation is the critical evidence collection step of your implemented security policies, procedures, and other internal controls based on the five SOC 2 Trust Services Criteria (TSC). It typically includes system descriptions, management assertions, risk assessments, previous audits, a control activities list, and other proof of compliance with common criteria. 

Proper documentation should detail the security controls – like authentication measures and technical testing for data protection – and prove that systems have been updated with the latest configurations and patches.

Your processes, procedures, and regular checks for vulnerabilities or outdated components must be explained clearly. Evidence is typically collected via screenshots, logs, documents, tickets, and other paperwork that supports the SOC 2 compliance program. 

What is SOC 2 Readiness? 

SOC 2 readiness is an assessment that acts like a dress rehearsal in preparation for the SOC 2 audit, helping to identify potential gaps in your controls and create a plan to remediate those gaps.

The assessment allows internal verification of an organization’s readiness for a SOC 2 examination, the adequacy of current controls, the detection of gaps that need fixing before the examination, and how to rectify these gaps. 

Accelerate Your SOC 2 Audit Preparation With I.S. Partners

Navigating through the complexities of a SOC 2 audit can be daunting. But with I.S. Partners by your side, every step on the path to reliable data security becomes clearer and more manageable. I.S. Partners is your trusted one-stop shop for all SOC 2 services. Our team has over 20 years of experience in the compliance industry in our bag, and we offer comprehensive support to ensure your organization meets SOC 2 standards with confidence.

Our team helps streamline this complex process and leverages its deep industry knowledge to identify, address, and bridge any potential compliance gaps. We understand that each organization is unique, so we tailor our approach to fit your specific needs and challenges.

Furthermore, I.S. Partners goes beyond traditional audit services. We can seamlessly onboard your existing software systems, ensuring they align with SOC 2 requirements without disrupting your operations. This capability not only simplifies the compliance journey but also enhances the efficiency and effectiveness of your security measures.

Partner with I.S. Partners today and experience firsthand how our dedication, expertise, and comprehensive service offerings can transform your SOC 2 journey experience into a strategic advantage.

About The Author

Anthony Jones

Anthony has over 30 years of experience and has worked across a spectrum of industries, including telecom, technology, insurance, financial services, manufacturing, and service companies.

He holds an impressive array of certifications, including Certified Information Systems Auditor (CISA), Certified Information Systems Manager (CISM), Qualified Security Assessor (QSA), and Certified ISO/IEC 27001 Lead Auditor.

Anthony has extensive knowledge in IT consulting and the expert ability to accurately determine needs, understand risk tolerances, offer alternatives to current situations, develop action plans, and cultivate longstanding client relationships.

Anthony’s area of expertise consists of Cyber Security and Cyber Risk Management, Payment Card Industry (PCI) Security, Privacy Management (PrivacyShield and GDPR), SOC for Service Organizations (SOC 1 and 2), and Sarbanes Oxley Compliance across various industries.

Before joining IS Partners, LLC, Anthony spent 10 years at PriceWaterhouseCoopers (PWC) as a Senior Manager. He provided strategic guidance to Fortune 100 financial services, manufacturing, insurance, and utility companies. Notably, he led the eastern region for the SOC for Service Organizations (SOC 1 and SOC 2) practice. Anthony holds a Bachelor’s of Science degree in Financial Management from Saint Joseph’s University.

He took his education further, earning an MBA with a Concentration in Information Systems, graduating Summa Cum Laude from SJU Haub School of Business.