By Henry Svendblad, CTO of Company Nurse powered by Lintelio

When evaluating potential vendor partnerships, your technology and security teams may require you to verify that an organization has a “SOC 2 certification” or “SOC 2 compliance.” But, to receive a more insightful response, consider asking, “Have you completed a successful SOC 2 audit and, if so, which type?”

So, what are the specifics of this audit? What are the actual requirements? What is the difference between a Type 1 and a Type 2 audit?  Why do so many companies refer to this as a “certification” or “compliance”? And why is it beneficial to work with an organization that has achieved a successful SOC 2 audit?

Read on to learn the answers to all these questions and more.

About SOC 2 Audits

System and Organization Controls 2 or SOC 2, is a security framework developed by the American Institute of Certified Public Accountants, focuses on controls at service organizations related to security, availability, processing integrity, confidentiality, or privacy. This framework ensures that third-party services securely store and process clients’ data.

SOC 2 audits hold particular significance for SaaS Intake Management software companies and contact centers in the risk industry. Given the sensitive nature of data involved in risk services, organizations must trust the systems they use to protect PHI and PII. This trust is not only vital for the well-being of workers but also crucial for maintaining the organization’s reputation and legal standing.

SOC 2 Audit Requirements

Organizations that receive a clean SOC 2 audit report must meet rigorous requirements, including maintaining a robust security program, documenting controls and processes, conducting regular testing of controls, and having a comprehensive plan for remediation.:

Have a strong security program in place

A strong security program is essential for an organization to protect its data and systems from unauthorized access, use, disclosure, disruption, modification, or destruction. Such a security program includes the following:

  • Risk assessment: Identifies threats and vulnerabilities, assesses their likelihood and impact.
  • Security policies and procedures: Develops clear, concise, and easily understandable policies.
  • Training and awareness: Trains employees on security policies and procedures and makes them aware of the risks that the organization faces.
  • Monitoring and logging: Vigilantly monitors systems for suspicious activity and logs all activity for review.
  • Incident response: Develops a plan for responding to security incidents, including steps for containment, eradication, recovery, and communication.

Document controls and processes

Documentation ensures an organization’s security controls are implemented and maintained effectively. In addition to a risk assessment and security policy and procedures, as detailed above, documentation should include the following:

  • Description of security controls: Clearly outlines the purpose, implementation, and testing of each control.
  • Flowchart of security processes: Illustrates how security controls interact with one another.
  • List of security assets: Enumerates all systems, networks, and data used by the organization.

Test controls regularly

An organization must test its controls to ensure that they are effective. Testing should include the following, along with incident response testing, as explained above:

  • Penetration testing: Simulates an attack on systems to identify vulnerabilities.
  • Vulnerability scanning: Scans systems for known vulnerabilities.
  • Change management: Tests system changes to ensure that they do not introduce new vulnerabilities.
  • Configuration management: Tracks and manages system configurations for security.

Have a plan for remediation

A remediation plan is necessary to ensure that identified vulnerabilities are addressed promptly and must include processes for:

  • Identifying and prioritizing vulnerabilities: Identifies vulnerabilities, assesses their severity, and prioritizes them for remediation.
  • Developing and implementing remediation plans: Executes plans and tracks progress.
  • Communicating remediation plans to stakeholders: Keeps stakeholders informed and provides updates on progress.

These requirements can be strenuous, but necessary, if an organization truly wants to ensure that its data (including client data) and systems are protected.

SOC 2 Type 1 vs Type 2 – What’s the Difference?

A SOC 2 Type 1 audit assesses the design of a service organization’s security controls at a single point in time. A SOC 2 Type 2 audit assesses the design and operating effectiveness of a service organization’s security controls over a period of time, typically three to 12 months.

A complete SOC 2 Type 1 audit provides assurance that the organization has designed its security controls in accordance with the SOC 2 Trust Services Criteria. This is a significant achievement, and it demonstrates the organization’s commitment to security.

Understanding the Terminology: Certification, Compliance, and Audit

The terms “SOC 2 audit” and “SOC 2 certification” are often used interchangeably, even though they have distinct meanings. A SOC 2 audit is an independent assessment of an organization’s security controls, while a SOC 2 certification is a formal declaration by an organization that it has met specific security requirements.

Organizations often use the term “certification” to make their security posture appear more rigorous than it actually is. By suggesting that they have achieved a certification, organizations may be implying a level of assurance that is not supported by the SOC 2 audit.

To avoid confusion, it’s important to use the correct terminology when referring to SOC 2 compliance. Organizations should refer to their successful SOC 2 audit as a “SOC 2 audit” rather than a “SOC 2 certification.” This will help to ensure that stakeholders have an accurate understanding of the organization’s security posture.

Benefits of Partnering with an Organization with a Successful SOC 2 Audit

The process of completing a SOC 2 audit is rigorous and demonstrates an organization’s commitment to technology, security, and client protection. But what are the benefits your organization can expect when partnering with a vendor that has undergone a SOC 2 audit? Anticipate increased trust, a reduced risk of data breaches, legal protection, improved compliance with industry regulations, and enhanced efficiency and productivity.

Increased trust

A SOC 2 report serves as evidence that your vendor partner has taken essential steps to secure its data, instilling confidence in the protection of your organization’s sensitive information. This, in turn, fosters trust among employees who can rely on your organization’s risk processes, promoting adherence to risk procedures and minimizing the risk of data breaches and other security incidents.

Reduced risk of data breaches

Organizations that have a clean SOC 2 audit report benefit from a diminished risk of data breaches. The audit identifies vulnerabilities in systems and processes, allowing for the implementation of effective controls to mitigate risks. Regular testing of these controls ensures their continued efficacy, significantly lowering the risk of data breaches and safeguarding both your organization’s and employees’ data.

Legal protection

Partnering with a vendor that has undergone a SOC 2 audit provides legal protection for your organization. In the unfortunate event of a data breach, a clean audit demonstrates compliance with data privacy laws. This can mitigate potential legal ramifications, including fines, lawsuits, and reputational damage, by showcasing that reasonable steps were taken to protect sensitive data.

Improved compliance with industry regulations

Industries often have specific regulations to which organizations must adhere. Partnering with a vendor whose security controls have been independently verified through a SOC 2 audit ensures a commitment to protecting data and may help your organization comply with its industry’s unique regulations. In addition, this offers assurance that your vendor is taking the necessary steps to meet and exceed the standards set by regulatory bodies.

Increased efficiency and productivity

A vendor with a successful SOC 2 audit can contribute to your organization’s efficiency and productivity in multiple ways. By collaborating with companies that prioritize security and data protection, your organization can enhance its risk management practices, leading to informed decision-making and optimal resource allocation.

Additionally, partnering with a vendor that diligently identifies and mitigates risks helps prevent costly incidents, such as data breaches. This commitment to security and compliance not only safeguards data but also boosts employee morale, emphasizing your organization’s dedication to data security and regulatory adherence.

Partnering with such an organization goes beyond mere compliance – it establishes a foundation for trust, risk mitigation, and operational excellence in today’s data-centric business landscape.

Company Nurse powered by Lintelio has undergone a SOC 2 Type 1 audit and achieved a clean audit report and can help your organization attain the above benefits and more. The company is transforming organizational risk management and incident reporting by streamlining the collection, management, and secure access and delivery of information. Founded in 1997, Company Nurse powered by Lintelio continues to grow and innovate to make accident reporting stress-free. Email to learn more!