A SOC audit is an objective assessment to determine if a service organization’s security controls operate effectively. In addition, the individual receives evidence that the service organization has continually provided adequate protection for client data and assets. A SOC certification can verify that requirements have been met based on standard criteria, such as how policies are established, how personnel is trained and monitored, how environment monitoring operates, and an overall risk assessment of different data processing systems.
What are SOC 2 and SOC 3 reports?
SOC compliance is a service mark of the American Institute of Certified Public Accountants (AICPA) and defines an independent report on controls at a company or organization. This examination includes internal controls (such as risk assessment, change management, operational effectiveness, and information security) over financial reporting provided by an independent assessor. It was created and developed in 2000 by the AICPA to ensure accountability for independently verified compliance with established control objectives.
SOC 2 is a set of requirements for any entity providing services to customers, including but not limited to cloud computing service providers. SOC 2 compliance concerns the service provider’s ability to commit and deliver on their stated controls, policies, and procedures over time. It covers all aspects of information security, including risk assessment, change management, operational effectiveness & information security. The standard allows the organization to conduct a gap analysis by comparing the statements made in the report with their internal controls.
A SOC 3 report is a third-party attestation engagement performed to express opinions about the security effectiveness of controls identified in published guidance within specified criteria. It must analyze the organization’s security processes and procedures, information systems and environments, and internal control relevant to securing those systems. It should also cover the privacy-related controls within the organization’s privacy policy and procedures.
In many ways, this mirrors the structure of a SOC 2 report, but the criteria for control selection and risk assessment and the evidence required to support an attestation are different. One of the main differences is that a SOC 3 report is much shorter and more general. A SOC 2 report is only available to the organization’s management, clients, other organizations, and individuals interested in it. The audit report also contains:
Opinions by the auditor.
A complete list of all systems and security controls from management.
Results from all tests done.
On the other hand, the findings of a SOC 3 audit can be made available to anyone without restrictions. In addition, the SOC 3 report describes a company’s background, its management, and the auditor’s opinion.
Both SOC 2 and SOC 3 are auditing standards that assess a service organization’s information security controls. Under the CSS’s auspices, this control-focused standard is developed to be used by third parties either as an evaluation method or as a basis for obtaining evidence that adequate security of cloud services has been achieved. This standard is used in three areas: guidance, monitoring, and assessment; all provide a proactive approach to improving data security. Once completed successfully, an individual can receive certification to show that their service organization adheres to best practice guidelines when processing and storing client data.
Which one to choose?
It is a complex question to answer and depends on the circumstances of each organization. There can be significant differences in what it takes to achieve each of these certifications. For example, an organization might have implemented security controls to achieve a SOC 2 certification. But as far as the information security program is concerned, those security controls (e.g., encryption) may not be relevant to meeting the requirements of a different standard such as SOC 3.
Each organization should assess their requirements and circumstances to decide if they should retain their SOC 2 and/or SOC 3 certification. In addition, regulatory and standards-based compliance requirements may have a more significant business impact than the certifications themselves.
The cost of completing both SOC 2 and SOC 3 audits can be prohibitive to many small organizations. However, an organization may want to hold onto both certifications if it achieves them because of the different nature of each certificate. For example, an organization might leverage that they are SOC 2 and SOC 3 certified when dealing with compliance-focused organizations such as a state or federal government agency.
The bottom line is this: while an organization needs to assess the benefits of both certifications, they should also consider what affects their business when deciding whether or not to retain them.