Business-to-business (B2B) companies are responsible for keeping their clients’ data safe and secure. Increasing cybersecurity threats like ransomware, malware, phishing, or man-in-the-middle attacks can lead to data loss or theft. B2B companies need robust internal processes and infrastructure to protect their customer data against cyberattacks, business risks, and human mistakes. Service Organization Controls 2 (SOC2), a voluntary compliance standard developed by the American Institute of CPAs (AICPA), has emerged as a reliable way to audit business systems and processes for security governance, training and awareness, risk analysis, and business continuity.
The comprehensive SOC2 audit reports can be an invaluable resource for improving your organization’s systems and processes. The evaluation considers people, physical and digital information, technology, and critical assets on the organizational level. SOC2 compliance ensures you have a robust infrastructure built on sound IT security and risk management principles.
Businesses are not required to be SOC2-compliant. It is a voluntary compliance standard. But B2B companies with access to personal and sensitive data proactively seek SOC2 audits to ensure their infrastructure meets the high standards needed for the safety and security of customer data.
A SOC2 compliance audit is performed by a trusted third party who evaluates the organization’s internal controls according to the AICPA’s Trust Services Criteria, which include the five trust principles described below:
Considers whether data and systems are protected against system damages, unauthorized access, and unauthorized dissemination of information. Companies need to protect data. The security principle looks at the level of protection available.
Considers whether appropriate controls are in place to ensure accessibility for operations, monitoring, and maintenance tasks. Companies with good availability have seamless access to data while protecting the information.
Considers whether system processing controls are complete, timely, accurate, valid, and authorized. Processing integrity examines if systems are performing their intended goals. Due to the number of systems an organization uses, processing integrity is only addressed on the functional or system level.
Considers how an organization controls the confidentiality of sensitive information. Control mechanisms should be in place to let the right parties use, access, retain, and disclose information. At the same time, users with system-level access should not be able to view or manipulate sensitive information of others like personnel data, contracts, or trade secrets.
Considers the control mechanisms for collecting, using, retaining, disclosing, and deleting personal information. Privacy can be considered a subset of confidentiality. It only applies to personal information, while confidentiality covers all sensitive data.
Businesses can request two types of SOC2 audits – SOC2 Type 1 and SOC2 Type 2. Both use the Trusted Services Criteria. Type 1 reports are based on evaluating systems and processes at a single point in time. In contrast, Type 2 reports are based on an evaluation over a more extended period.
A SOC2 Type 1 report looks at design controls. It evaluates the policies and procedures that detail the life cycle of each control and the parties in charge of them. It also validates the application of each control, but just with one example (a single point in time).
On the other hand, a SOC2 Type 2 report evaluates the operating effectiveness of the controls. An auditor will assess how the controls are applied and whether they are sustainable over time (a more extended period). For this reason, to verify Type 2 compliance, the companies need a few months of preparation. Naturally, Type 2 audits take longer. The audit time depends on the auditor’s bandwidth and the complexity of the organization.
B2B companies might collect, process, retain, or control their client’s data. The systems and methods of the B2B company need to have the capabilities to handle the data securely. Here are the main reasons companies should consider SOC2 audits:
SOC2 is already a trusted compliance standard across government, finance, and healthcare industries. It is gaining popularity in other IT sectors. B2B businesses have a high probability of getting requests from their clients to provide SOC2 audit reports.
When competing against other B2B companies, a SOC2 certification can help you stand out. Potential clients are more likely to entrust you with their data when you demonstrate that you have the necessary systems, processes, and controls to handle their data securely.
A SOC2 audit is a comprehensive process that requires preparation. Just preparing for the audit can help you see the security weaknesses, risks, and vulnerabilities in your processes and infrastructure. The audit gives a roadmap to improve your security.
SOC2 audit checks whether companies have established control for training and awareness programs. Before your organization goes through a SOC2 audit, your organization has to establish an annual security awareness training for all employees. As a result, your employees learn to examine their security behavior and daily operations. It raises employee awareness about security practices and provides your employees with the knowledge and tools to build a culture of security.
SOC2 compliance means your business systems and processes are more likely to withstand cyber attacks or other disasters. SOC2 reports point out risks and weaknesses in your security and data processing practices. The audit works as a preventive measure and increases your preparedness for cyber attacks, natural disasters, or human mistakes. Preventive measures ensure business continuity for your organization in adverse conditions.
SOC2 audits are expensive and time-consuming. But it is an investment in the future of your B2B company. SOC2 compliance can open new doors for your business, give you a competitive edge and improve your operational efficiency while keeping your customer data secure. It is essential to find a trusted SOC2 partner to help you navigate the audit process.
If you want to learn more about SOC2 audits for your B2B company, please get in touch with Flugel today. We have experienced SOC2 consultants who can help you understand the requirements and provide guidance to achieving compliance.
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