At the heart of any successful organization in this digital entrepreneurial landscape are effective data use and management. To increase their data processing and storage capacities while keeping costs manageable, many institutions are outsourcing some of their data functions to third party vendors.
In light of increasing cybersecurity threats, service organizations are required to put in place adequate cybersecurity measures. This is done to protect their clients – and their customers- from any liability or threat that may result from a data breach.
To address the rising data privacy and security threats, the American Institute of Certified Public Accountants (AICPA) developed the SOC 2, a set of compliance requirements for service organizations. SOC 2 requires service organizations to uphold five trust services criteria when handling client data. They are:
Security- Ensuring that the integrity or privacy of information is not compromised
Availability- Clients’ data should be available to them at all times
Confidentiality- Appropriate measures must be taken to safeguard confidential data
Processing integrity- The system's processing capacity is sufficient for the organization to meet its objectives
Privacy- Personal information is handled as per the client’s needs
SOC 2 Audits
For service organizations to demonstrate to clients that they can keep their data secure, they must have SOC 2 certification. To achieve SOC certification, the organization must undergo a SOC 2 audit to ensure that it follows the necessary guidelines of handling data.
Since the AICPA developed the SOC 2 standards, only certified public accountants or CPA organizations can conduct a SOC 2 audit.
How To Conduct A SOC 2 Audit
As an accountant, your role as a SOC 2 auditor is not just ensuing service organizations are compliant but helping them set up the best security measures and protocols. To achieve this, you should take the following action steps.
Determine the Scope of the Audit
SOC audits vary from one organization to the next based on which trust service criteria each organization needs to be reviewed. Therefore, you should first work with the service organization to determine which service controls will be the subject of the audit.
This should be based on legal or regulatory obligations as well as what is necessary to ensure commitments to clients are met. You should also ensure that the organization has chosen a reporting period. It is recommended that SOC audits are conducted at least once every six months to ensure the organization remains compliant.
Provide a List of Necessary Documents
Based on the service criteria to be reviewed, give the service organization a list of the documents that you will need for the audit. Such documents may include asset inventories, change management information, organizational charts, and on-boarding and off-boarding processes.
Ensure That The Organization Has Conducted a Gap Analysis
The goal of a SOC audit is to ensure that a service organization's data handling practices are sufficient to guarantee the security and integrity of clients' data. For this to be achieved, the organization must have well-established goals in regards to how they process personal information.
It is recommended that organizations conduct gap analysis before SOC audits. This involves reviewing systems against chosen criteria and ensuring that key controls are in place and documented.
This process helps organizations detect and remediate issues before the audit, as well as reduces their costs.
The auditing process involves the evaluation of the controls for each trust service criteria under review. Check whether they are working as required and gather as much evidence as you can.
For the audit process to progress smoothly, you should:
Develop a project plan
Evaluate the operating effectiveness of controls
Deliver the report to the client
Evaluate the organization's SOC 2 preparedness based on the services they offer. For this, you will need to check their system configuration files, signed memos, screenshots, as wells as organizational structure.
Once you have identified any gaps in their system or processes, relay the information to the client and allow them to make recommended adjustments. Assist them with the same to ensure their systems and controls are effective.
What To Include In A SOC Report
The contents of a SOC report depends on the trust service criteria an organization wants to be reviewed. SOC reports include:
An opinion letter
Assertions by the management
An elaborate description of the service or system
Trust criteria reviewed
Results and methods used for testing
You should also include any other information that may be relevant and indicate whether the organization complies with AICPA TSC.
Go Beyond Basic Compliance
As a SOC auditor, you should aim to give the most value to your clients. Any time you conduct an audit, the recommendations you give should be aimed at helping the organization achieve the highest security standards possible.
By going the extra mile, you will earn their trust and develop a reputation of reliability that will help you get more clients.