Security has always been a big concern for business organizations. Nowadays, it’s an even more significant concern, and it isn’t hard to understand why. The technology world changes at an amazingly fast pace. Companies around the world increasingly rely on the cloud with each passing year. And with each passing year, we see the number of security threats increase. That’s why compliance requirements are crucial in this day and age. We’re here today to talk about one specific compliance requirement: SOC 2 compliance. SOC 2 is one of the most common compliance requirements organizations have to adhere to. But what is SOC 2, and why should your company care?
In short, SOC 2 is an auditing procedure. It’s meant to ensure that a company appropriately manages its data to avoid security threats. In today’s post, we’ll break down the essential things you need to know to prepare your company for SOC 2 compliance. However, we attack this topic from a particular angle, since this an SOC 2 compliance guide targeted at startups.
We start with definitions. You’ll learn about the definition of SOC 2 compliance, understanding what it is, and the kinds of organizations that should get this auditing. Then we’ll briefly cover the reasons why SOC 2 compliance is essential even for companies at such an early stage of development.
After that, we proceed to the central part of the article, in which we’ll offer five tips on how to prepare your startup for SOC 2 compliance. Let’s begin!
What is SOC 2 compliance?
The definition of SOC 2 is twofold. First, SOC 2 is a technical audit process. It’s also a requirement for an organization to write, implement, and follow security procedures.
AICPA (American Institute of CPAs) developed SOC 2 as a component of its Service Organization Control reporting platform. SOC 2’s goal is to make systems manage customer data in such a way that they ensure the following five principles: security, availability, processing integrity, confidentiality, and privacy.
Who should adhere to SOC 2?
SOC 2 applies to companies that use cloud solutions to store customer data. It means that any company that uses cloud solutions to store customer data should adhere to SOC 2. That encompasses many or even most technology companies, including virtually every SaaS company out there.
With that out of the way, let’s analyze why startups specifically need to pursue SOC 2 compliance.
SOC 2 for startups: why does it matter?
Should startups care for compliance requirements such as SOC 2? People might argue, for instance, that companies at this early stage have neither the budget nor the personnel to undergo such an endeavor. Thus, it’d be better to wait until the company is larger and more established.
I beg to differ. There are real benefits to starting with the SOC 2 compliance process as early as possible.
For starters, some organizations out there really value compliance. These tend to be organizations in strictly regulated industries, such as banks or fintech, or larger organizations, like established enterprises. When you get your company certified, it becomes easier to get these types of organizations to work with you as customers or partners.
Additionally, it becomes easier to do business with your clients. Sometimes, the back-and-forth over security practices can….really…drag. The SOC 2 compliance certificate works as sort of a shortcut, since the auditing process is handled (and the compliance report is issued) by a third-party trusted authority.
Becoming SOC 2 compliant when you’re smaller might even be easier. When the organization still doesn’t have a lot of people, communication is more straightforward. A lot of procedures and processes aren’t yet set in stone, so you are able to more easily change existing processes and put in the right foundations for long term success.
Finally, keep in mind that the procedures and policies you’re going to invest in are good practices that will bring benefits to your organization. It seems that companies often forget about this and become too fixated on getting certified. The benefits that they get are often thought of as an afterthought, but you shouldn’t do that.
SOC 2 compliance for startups in five steps
Up until now, this post was mainly about definitions — what SOC 2 compliance is, why to care about that as a startup, that kind of thing. Hopefully, by now, you’re convinced that getting SOC 2 compliance for your organization is a worthy investment, even if—perhaps especially if—it’s still in its early stages.
Without further ado, we’ll now get to our brief, step-by-step guide on how to prepare to get your company SOC 2 certified.
Step #1 – get ready
When it comes to SOC 2 compliance, your very first step is getting ready for it. Before the actual auditing, your organization must have a clear understanding of the whole SOC 2 auditing process. You do that with a SOC 2 scoping and readiness assessment. Such an assessment should include the following items:
- An overview of the AICPA SOC 2 auditing framework.
- An analysis of your policies, procedures, and processes to find out what problems you need to fix before the audit.
- The development of a roadmap for SOC 2 compliance. By implementing and following the roadmap, you should be able to obtain the SOC 2 compliance report on time and budget.
Step #2 – get your documentation ready
Startups tend to be a little chaotic. They lack the structure of larger, more established organizations. Roles might be not super well defined, and you may have people that perform a wide variety of tasks. Combine that with a fast-paced environment where everything changes by the minute, and time-to-market is crucial. What do you get? An organization in which it’s highly unlikely to have dedicated personnel to handle documentation. As it turns out, SOC 2 compliance requires quite a lot of documentation.
When the auditors show up, you should have—at the bare minimum—the list of policies and procedures for change management, access control, data backup, and incident response.
Step #3 – start fixing what isn’t good
Now is the time to roll up your sleeves. In this phase, we’ll start putting into practice the measures you’ve decided upon during step #1 (the “getting ready” phase, AKA scoping and readiness assessment.)
We split the work this step requires into two main categories: security measures and operational measures. You’ll have plenty of work to do in this step. For instance, when it comes to security, you’re going to have to spend both time and money doing things like:
- Reconfiguring your IT infrastructure
- Implementing two-factor authentication solutions
- Implementing vulnerability scanning and application monitoring and protection tools
- Setting up file integrity monitoring solutions
For the operational measures, your main tasks should be performing a risk assessment, conducting security awareness training, and testing your incident response plan.
Step #4 – perform a comprehensive test
Is your organization done with fixing the problems uncovered in the previous steps? Great! Now it’s time to perform a comprehensive test—AKA a “dry run.”
Using the AICPA SOC 2 standard, pretend you’re an auditor and evaluate your own company against the criteria we’ve mentioned at the beginning of the post (security, availability, processing integrity, confidentiality, and privacy.)
Then, if you don’t feel confident about the results, go back to previous steps. Iterate on them until you feel ready to schedule your audit.
Step #5 – learn about audits and adjust your expectations
In order to do great at your SOC 2 auditing, you need to understand what an auditing process is and the details of how it happens.
It all starts with the auditors sending you a list of things you should provide to them for the audit process. This list is sometimes called a PBC list, which stands for “Prepared By the Client.” The auditors may ask you to get many of the items on the list ready before they get to your company. That’s their way of doing a sort of pre-evaluation of your internal processes.
What auditors look for
What follows is a brief list with some of the most commonly asked items by the auditors during this phase:
- Policies and procedures. Well, we have already mentioned this, but it doesn’t hurt to repeat it. You must have your security and operational procedures written down in the form of clear, accessible, readable documentation. That’s essential.
- Records of system settings. You’ll most likely have to provide some kind of record of your system settings. You can use screenshots for that. If your organization employs Infrastructure As Code, you can perhaps show the auditors the actual configuration files you use. They will likely ask you to show them how you configure your servers, what are the versions of operating systems, web servers, and other types of software they run, and other pieces of information like that.
- Operational evidence. The auditors may request proof that you have performed the tasks outlined in the previous steps. In other words, they’ll want to know for sure whether you’ve performed things such as the readiness assessment and employee security training. They’ll also want to know for sure that you’ve tested your incident response plan.
- Interviews. Auditors will often spend a considerable amount of time interviewing personnel for finding out more about their roles, responsibilities, and related processes.
Nowadays, virtually all software companies make use of cloud solutions to store customer data. As a result, SOC 2 is one of the most important and sought after security compliances out there.
However, people often make the mistake of thinking that only large, established organizations benefit from getting SOC 2 compliance. In today’s post, we’ve shown you that not only can startups benefit a lot from getting ready for SOC 2, but it’s often even easier for them than it is for larger, older companies. We’ve also offered five tips you can use to help your startup get ready for SOC 2.
Getting your company compliant under SOC 2 will not only bring it credibility and trust, it will also produce tangible security benefits that will benefit the organization for years to come.
If you’re interested in learning about how Sqreen can help you achieve SOC 2 compliance by helping you protect your customer data and respond to attacks, sign up for a demo.
This post was written by Carlos Schults. Carlos is a .NET software developer with experience in both desktop and web development, and he’s now trying his hand at mobile. He has a passion for writing clean and concise code, and he’s interested in practices that help you improve app health, such as code review, automated testing, and continuous build.