What is SOC 2?
SOC 2, or System and Organization Controls 2, is an auditing framework developed by the American Institute of Certified Public Accountants (AICPA). It sets requirements for how organizations should manage data based on five Trust Services Criteria (TSC).
A SOC 2 audit results in a report that verifies whether an organization’s controls meet the standards set by these criteria. There are two types of SOC 2 reports:
Type I: Evaluates the design of controls at a specific point in time.
Type II: Evaluates the operating effectiveness of those controls over a defined period, usually three to twelve months.
Why Does SOC 2 Matter?
Meeting SOC 2 requirements can build trust with customers, reduce barriers in sales cycles, help meet contractual and regulatory requirements, strengthen internal processes, and differentiate organizations in competitive markets where this would influence purchasing decisions.
Who Needs SOC 2?
Any organization that stores, processes, or transmits customer data may need SOC 2 compliance. Even if not contractually required, organizations often pursue SOC 2 to build trust and to further expand into new markets.
Types of SOC 2 Audits & Reports
There are two main types of SOC 2 reports, each serving a different purpose:
SOC 2 Type I
SOC 2 Type I evaluates the design of an organization’s controls at a single point in time. It’s often chosen by companies pursuing SOC 2 for the first time since it can be completed quickly, providing baseline assurance to customers and stakeholders. However, because it doesn’t test how controls operate over time, it’s less convincing for customers who need ongoing assurance.
SOC 2 Type II
SOC 2 Type II assesses both the design and operating effectiveness of controls over a defined period, usually three to twelve months. Considered the gold standard, it demonstrates that controls function reliably and consistently, making it especially valuable for enterprise clients or regulated industries. While it requires more preparation, resources, and time, it provides stronger assurance of continuous compliance.
Scope Based on the Five Trust Services Criteria (TSC)
Types of Third-Party Risks
In addition to choosing between a Type I or Type II report, organizations must also define the scope by selecting which of the five Trust Services Criteria (TSC) to include:
Security: Mandatory for all SOC audits, as it forms the foundation of protecting systems and data.
Availability: Often selected by cloud providers or service organizations where system uptime is critical.
Processing Integrity: Relevant for organizations where accuracy and reliability of transaction processing is central to service delivery.
Confidentiality: Chosen by organizations handling proprietary, contractual, or sensitive business data.
Privacy: Important for organizations that collect and process personal information, particularly those subject to privacy laws such as GDPR or CCPA.
The scope of the report should align with customer expectations, contractual requirements, and the organization’s risk profile.
Essential Controls & Activities Matrix
SOC 2 requires organizations to demonstrate operationalized security practices. The following control areas form the backbone of effective compliance programs:
Security Program Oversight: Leadership must establish governance for security, assign roles, and oversee program execution.
Policies and Procedures: Formal documentation ensures consistency and provides auditors with evidence of established practices.
Access Management: Controls must restrict user access, enforce least privilege, and monitor account activity.
Asset Inventory and Classification: Systems, applications, and data must be identified, categorized, and managed based on sensitivity.
Configuration and Change Management: Secure baselines must be established, and changes should follow approval and testing processes.
Vulnerability Management and Penetration Testing: Regular scanning and remediation help address weaknesses before they are exploited.
Incident Response Plan and Testing: Formal plans should exist, be tested, and demonstrate the ability to respond effectively to incidents.
Logging, Monitoring, and Alerting: Systems must generate logs, monitor for suspicious activity, and escalate alerts in real time.
Third-Party Risk Management: Vendors should be assessed and monitored for their own security and compliance posture.
Security Awareness Training: Employees must be trained to identify and prevent security risks, such as phishing attacks.
SOC 2 Audit Lifecycle
The SOC 2 process is not a one-time task but a structured lifecycle:
Readiness Assessment
Scope and TSC Definition
Control Design and Policy Documentation
Evidence Collection and Tool Implementation
Internal Controls Testing
CPA Audit Execution
SOC 2 Report Delivery
Continuous Compliance and Monitoring
Preparing For and Passing the Audit
A successful SOC 2 audit requires a clearly defined scope, assigned control ownership, and consistent evidence workflows. The following are things that will help organizations prepare and pass an audit:
Automated evidence collection and monitoring
Automating evidence collection from identity providers, code repositories, cloud infrastructure, and endpoint systems ensures accuracy and efficiency. Continuous monitoring reduces blind spots between audits and supports early detection for the remediation of issues.
Internal vs. external assessments
Internal assessments, typically led by security and GRC teams, measure the maturity of current controls. External assessments conducted by independent firms provide a structured gap analysis and remediation plan.
Handling exceptions and remediation
Audit exceptions occur when a control is missing or not functioning as intended. Auditors document frequency and impact, while management responses outline root causes and corrective actions.
Common Pitfalls
Even with strong preparation and ongoing compliance processes in place, organizations often face recurring challenges during SOC 2 audits that can delay reports or lead to exceptions.
Poor scope definition
Misaligned documentation vs. practice
Gaps in continuous monitoring
Incomplete third-party controls
Inadequate incident response evidence
Tools & Platforms for SOC 2 Compliance
Achieving SOC 2 compliance is easier with the right tools, which replace messy spreadsheets and email chains with streamlined processes and automation:
GRC Software – Centralizes evidence, policies, risks, and remediation into one system.
Automated Compliance Tools – Collect audit evidence continuously, monitor controls, and flag gaps in real time.
Security Monitoring Tools – Use SIEMs, logging, and vulnerability scanning to detect anomalies, and provide audit-ready evidence.
Vendor Risk Management Tools – Assess and track third-party risks while streamlining auditor reviews.
Policy & Training Tools – Distribute and track policies and training with clear audit trails.
Don’t stop here!
Download the full guide below for more detailed insights into SOC 2 audits, how to maintain compliance, common pitfalls and how to avoid them, and more!
