A Service Organization Controls (SOC) 2 report is an independent attestation that evaluates the effectiveness of a company’s controls as they relate to Security, Availability, Processing Integrity, Confidentiality, and Privacy. SOC 2 has become the baseline of doing business in the Unites States, especially for organizations that process, store, or transmit data for their clients or partners.

What does that mean for your business, and how should you prepare? In this post, we cover everything you need to know about SOC 2.

What is SOC 2?

A SOC 2 audit is the industry standard for service organizations — especially SaaS companies, data centers, and managed service providers (MSPs) — that need to prove they are protecting customer and partner data. A SOC 2 audit examines your organization’s security posture based on the requirements within the SOC 2 framework, known as the Trust Services Criteria (TSC). Providing an independent, reliable source of assurance, a SOC 2 report is often considered a cost of doing business because it establishes trust, drives revenue, and unlocks new opportunities. 

Why is SOC 2 compliance important? 

A SOC 2 report is the best way to demonstrate to your customers and partners that your organization will protect their data. SOC 2 helps instill trust among clients who rely on these service providers for critical business operations while also promoting an ongoing culture of compliance within the organization itself. This framework is a baseline expectation for a strong security program and competitiveness in the market.

Oftentimes, a SOC 2 report is an acceptable alternative to the time-consuming, 500-question security survey.

What are the key benefits of SOC 2 compliance? 

SOC 2 positions your business for growth. By meeting this industry standard, organizations can confidently expand into new markets, secure larger deals, and build a foundation for long-term success. 

Organizations who complete a SOC 2 assessment will benefit from the following: 

• Accelerate sales cycles 
• Unlock larger deals 
• Build customer trust 
• Mitigate security risks 
• Strengthen brand and market position

Learn more about the advantages of SOC 2 compliance in our blog, How SOC 2 Powers Business Expansion.

How can a SOC 2 report help small businesses scale?

Startups or small businesses will need a SOC 2 report to go upmarket and close large deals. Below are some benefits you will notice after earning a SOC 2 report:  

• Development of strong policies and procedures  
• Increased credibility with investors and partners 
• A strong competitive advantage 
• Saved time, money and resources on a potential data breach  

Who uses a SOC 2? 

While SOC 2 applies to almost any organization, it’s particularly important to data centers, software-as-a-service (SaaS) companies, and managed service providers (MSPs). Service organizations that process, store, or transmit data for their clients or partners will benefit from a SOC 2 report.

Who can perform a SOC audit? 

Only licensed CPA firms that are accredited by the American Institute of Certified Public Accountants (AICPA) can complete a SOC 2 audit. We recommend choosing a partner that has its own audit management platform that can drive efficiencies during your audit cycle, helping your team work smarter, not harder.

What is the AICPA and why does it matter in SOC 2? 

The AICPA organization is the governing body of the SOC framework that established the TSC. When you complete the SOC 2 attestation and receive your final report, your organization can download and display the logo issued by the AICPA. 

What are the SOC 2 Trust Service Criteria? 

SOC 2 assesses your security posture using the Trust Services Criteria (TSC). Each criterion focuses on a different area of data protection, allowing organizations to tailor the audit scope to their business model, customer needs, and compliance goals:

• Security: Comprised of 9 control families ranging from organization and management to risk assessment, to logical security and change management. This criterion is required in every SOC 2 report. 

• Availability: Addresses controls related to availability and redundancy of services to meet client SLAs. The Availability Criteria is a great add-on for most organizations. 

• Processing integrity: Addresses controls related to accurate processing of customer data without corruption or unauthorized alteration. Processing Integrity is largely specific to an organization’s services and not often applicable to all organizations. 

• Confidentiality: Addresses controls related to protection of data deemed confidential between an organization and its client. This extends to any data deemed confidential. The Confidentiality Criteria is a great add-on for most organizations. 

• Privacy: Addresses controls related to the protection of Personally Identifiable Information (PII). This is anything that can be tied to an individual. Privacy is large and cumbersome, and only applicable to organizations that store, process, or transmit PII.

What are the top policies and procedures needed for a SOC 2 audit?  

To start preparing for your SOC 2 examination, begin with the 12 policies listed below as they are the most important to establish when undergoing your audit and will make the biggest impact on your security posture. 

What are SOC 2 controls?

SOC 2 controls are a collection of policies, procedures, and directives dictating the operation of an organization’s systems, ensuring the security, availability, processing integrity, confidentiality, and privacy of both company and customer data. These guidelines aid organizations in managing and safeguarding sensitive information, fostering the implementation of robust security measures and mitigating the likelihood of data breaches and ensuring adherence to regulatory mandates.

How to start a SOC 2 audit 

Preparing for you SOC 2 audit will help you avoid any lengthy delays or unexpected costs. Prior to beginning your SOC 2 audit, we suggest you follow the below guidelines: 

• Undergo a SOC 2 readiness assessment to identify control gaps that may exist and remediate any issues 
• Decide which TSCs to include in your audit that best align with your customer’s needs 
• Choose a compliance automation software tool to save time and cost. Pro tip- select a licensed CPA firm that also offers compliance automation software for an all-in-one solution and seamless audit process that doesn’t require you to switch vendors mid-audit. 

During the initial stage of the audit process, it’s important that your organization follow the below guidelines: 

• Review recent changes in organizational activity (personnel, service offerings, tools, etc.) 
• Create a timeline and delegate tasks (compliance automation software will make this activity much less time consuming) 
• Review any prior audits to remediate any past findings   
• Organize data and gather evidence ahead of fieldwork (preferably with automated evidence collection) 
• Review requests and ask any questions (pro tip- it’s important to choose an experienced auditing firm that’s able to answer questions throughout the entire audit process) 

What is compliance automation software? 

If you’re looking for SOC 2 software, compliance automation software may be the best solution. Compliance automation software allows users to consolidate all audit information into a single system to gauge readiness, collect evidence, management requests and continually monitor your security posture. 

When selecting a compliance automation software it is recommended that you look for one that offers: 

• Automated readiness assessments  
• Automated evidence collection 
• Policy templates 
• Auditor assistance when needed 
• Cloud integrations 
• Project dashboard 
• Consolidated audit requests 
• Continuous monitoring  

It’s important to note that compliance automation software only takes you so far in the audit process and an experienced auditor is still needed to conduct the SOC 2 examination and provide a final report.  

What’s the timeline of the SOC 2 audit process? 

SOC 2 timelines vary based on the company size, number of locations, complexity of the environment, and the number of TSCs selected. Listed below is each step of the SOC 2 audit process and general guidelines for the amount of time they may take:  

Step 1: Find the right partner and team  

A SOC 2 must be completed by a licensed CPA firm. If you choose to utilize compliance automation software, it’s recommended that you select an auditing firm that also offers this software solution for a more seamless audit.  

Step 2: Information requests: Estimated timeline: 2-3 Business Days  

Your audit team will generate an Information Request List (IRL) for your organization. The information in this list is based on the scope, the chosen TSC, and other factors such as cloud hosting services, locations, and company size. 

Step 3: Readiness assessment: Estimated timeline: Varies based on scope 

If it’s your first audit, we recommend completing a SOC 2 Readiness Assessment to find any gaps and remediate any issues prior to beginning your audit. 

Step 4: Evidence collection for a SOC 2 audit: Estimated timeline: Varies  

The time it takes to collect evidence will vary based on the scope of the audit and the tools used to collect the evidence. Experts recommend using compliance software tools, like A-SCEND, to greatly expedite the process with automated evidence collection.  

Step 5: Fieldwork: Estimated timeline: 2-6 Weeks  

This phase includes walkthroughs of your environment to gain an understanding of your organization’s controls, processes and procedures. The time it takes to complete this phase will vary based on your scope, locations, TSCs, and more but generally, most clients complete in two to six weeks.  

Step 6: The SOC 2 report: Estimated timeline: 3 Weeks  

The audit team will provide a SOC 2 report for your company that comes in two parts. Part one is a draft within three weeks of completing the fieldwork in which you’ll have the opportunity to question and comment. Part two is a final report two weeks after the draft has been approved with the inclusion of the updates and clarifications requested in the draft phase. 

What’s the difference between SOC 2 Type 1 and Type 2? 

When determining what type of SOC 2 assessment to undergo you will have two options resulting in two different reports, a SOC 2 Type 1 audit and a SOC 2 Type 2 audit. There are two main differences between the different audit types. The first is the duration of time in which the controls are evaluated. A SOC 2 Type 1 audit looks at controls at a single point in time. A SOC 2 Type 2 audit looks at controls over a period of time, usually between 3 and 12 months.   

In addition, SOC 2 Type 2 audits attest to the design, implementation, and operating effectiveness of controls. A Type II provides a greater level of trust to a customer or partner as the report provides a greater level of detail and visibility to the effectiveness of the security controls an organization has in place.  

What’s the difference between SOC 1 and SOC 2? 

The difference between SOC 1 and SOC 2 is that a SOC 1 audit addresses internal controls over financial reporting. A SOC 2 audit focuses more broadly on information and IT security. The SOC 2 audits are structured across five categories called the Trust Services Criteria and are relevant to an organization’s operations and compliance. 

What is a SOC 3 report? 

To be issued a SOC 3 report, you must have first earned a SOC 2 report. A SOC 3 report is a public-facing version of the SOC 2 report intended for distribution and/or publication without the need for a non-disclosure agreement (NDA). A SOC 3 report is a SOC 2 report that has been scrubbed of any sensitive data and provides less technical information making it appropriate to share on your website or use as a sales tool to win new business. 

What’s the difference between SOC 2 and ISO 27001? 

Both a SOC 2 report and ISO/IEC 27001 certification are extremely attractive to prospective customers. Below are the major differences: 

Certification vs. attestation: ISO 27001 is a certification issued by an accredited ISO certification body and includes an IAF (The International Accreditation Forum) seal. SOC 2 is an attestation report provided by a third-part assessor such as a CPA firm. 

ISMS vs. Trust Services Criteria: ISO 27001 is a pass/fail audit focused on the development and maintenance of an Information Security Management System (ISMS). SOC 2 is structured around the five TSCs and includes an auditor’s opinion of the controls in place for each chosen TSC. A final SOC 2 report is much more detailed than the one-page letter that you receive with an ISO 27001 certification.  

Global reach: ISO 27001 is an international standard throughout the world while SOC 2 is primarily US-based. While SOC 2 is U.S.-based, it’s becoming increasingly accepted by global organizations, particularly those doing business in the U.S.

Renewal timelines: SOC 2 reports are valid for 12 months and require annual renewal. ISO 27001 certifications are valid for three years, with annual surveillance audits.

ISAE 3000 and SOC 2 

The International Framework for Assurance Engagements (ISAE) 3000 is a framework introduced by the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting body that is widely recognized in Europe. An ISAE 3000 is an integration to a SOC 2 report, typically requested by international clients. 

Key differences: 

• SOC 2 is the most recognized standard in the U.S., while ISAE 3000 is an international standard. 

• If an organization in the U.S. needs to demonstrate its commitment to information security and privacy, it may choose a SOC 2 report. If it needs to demonstrate compliance with international standards, it may opt to include an ISAE 3000 report as well without adding extra work. 

• A-LIGN is equipped to issue SOC 2 reports with ISAE 3000 integration, to allow organizations to meet both standards, and expand their international reach. 

Can you fail a SOC 2 examination? 

No, you cannot “fail” a SOC 2 audit. It’s your auditor’s job during the examination to provide opinions on your organization within the final report. If the controls within the report were not designed properly and/or did not operate effectively, this may lead to a “qualified” opinion. This indicates that one of the SOC 2 criteria had testing exceptions that were significant enough to preclude one or more criteria from being achieved.  Audit reports are crucial because they speak to the integrity of your executive management team and affect investors and stakeholders. 

What should I do with my final report? 

While you’re not able to publicly share your SOC 2 report unless under NDA with a prospective customer, there are ways you can utilize your SOC 2 assessment achievement for marketing and sales purposes. 

1. Announce earning your SOC 2 report with a press release on the wire and on your website.  Then, share on your social media platforms! 

2. Showcase the AICPA badge you earned on your website, email footers, signature lines and more. 

3. Send a short email to customers announcing your SOC 2 report. 

4. Write a blog around earning your SOC 2 report and how this effort further demonstrates that you take your customer’s data security seriously.  

5. Teach your sales team how to speak about SOC 2 and the benefits it provides to customers. 

If you would like a public-facing report to share, consider purchasing a SOC 3 report.

What is the history of SOC 2? 

In 2010, the AICPA (The American Institute of Certified Public Accountants) introduced SOC 1 and SOC 2 to combat the growing need of companies to validate their cybersecurity posture.  

What are a few helpful SOC 2 resources? 

Everything You Need to Know: SOC 2 Examination 

SOC 2 Checklist: Preparing for a SOC 2 Audit 

SOC 2 Definitive Guide

SOC 1 vs SOC 2: What’s The Difference?

SOC 2 Framework: What You Need to Know

A Guide to SOC 2 Reporting: What Is a SOC 2 Report?

What are the SOC 2 Trust Services Criteria?

SOC 2 Compliance Requirements: An Overview

SOC 2 Controls: Everything You Need to Know

What’s an example of SOC 2 in the real world? 

Below are several customer testimonials in which the organization earned a SOC 2 report to drive revenue, build customer trust and better their security posture. 

Menlo Security reduces evidence collection time by 60% with consolidated audit approach

Obsidian Security scales compliance program with A-LIGN and Drata

Orbital leads the way in the European fintech & crypto market with SOC 2 compliance

Boomi showcases cybersecurity dedication with 10+ compliance certifications and attestations

Network Coverage sets standard in CMMC & multi-framework compliance for MSPs

Anthology’s commitment to compliance elevates edtech standards

Inriver reduces time spent on compliance by 45% with A-LIGN & Drata

SOC 2 Certified Companies: Real Success Stories & Insights

SOC 2 FAQs

SOC 2 not only helps companies demonstrate their commitment to security and trust, but also supports business growth, customer confidence, and regulatory expectations. Below, we answer some of the most common questions organizations ask when deciding whether SOC 2 is right for them.

Is SOC 2 required by law? 

No, SOC 2 compliance is not a legal requirement. It is a voluntary attestation report. That said, many enterprise customers require SOC 2 contractually as part of their vendor risk management and due diligence process.

How long is a SOC 2 report valid? 

When you earn your final SOC 2 report, it’s generally valid for 12 months. Therefore, a SOC 2 audit should be conducted annually as an internal benchmark to assess your security posture year-over-year.  

How much does a SOC 2 audit cost?

The cost of a SOC 2 audit typically ranges from $20,000 to $150,000 or more, depending on factors like company size, system complexity, audit scope, and whether the organization is pursuing a SOC 2 Type I or Type II report. First-time audits often require additional preparation and remediation, which can impact overall cost.

How long does a SOC 2 audit take? 

The timeline for a SCO 2 audit varies based on the company size, number of locations, complexity of the environment, and the number of TSCs selected. A Type 1 audit evaluates your systems at a specific moment and usually takes two to four weeks to complete. A Type 2 audit requires your auditor to observe your controls operating effectively over a specific period, which normally spans six to 12 months.

Can startups get SOC 2? 

Startups of all sizes can achieve SOC 2. Many early-stage companies pursue SOC 2 to meet customer expectations, shorten sales cycles, and demonstrate trust as they scale.

You can find more common SOC 2 questions here.

Ready to start your SOC 2 audit?  

If you’re ready to take the next step, contact A-LIGN today to begin your journey to SOC 2 compliance. The A-LIGN difference is:  

• 17.5k+ SOC assessments completed  

• #1 SOC 2 issuer in the world  

• 200+ SOC auditors globally 

A-LIGN is the leading provider of high-quality, efficient cybersecurity compliance programs. Combining experienced auditors and audit management technology, A-LIGN provides the widest breadth and depth of services including SOC 2, ISO 27001, HITRUST, FedRAMP, and PCI. A-LIGN is the number one issuer of SOC 2 and a leading HITRUST and FedRAMP assessor.