Ensure data security with SOC 2 controls

TLDR: Are you looking to enhance your organization’s data security posture, instill greater trust with your customers, and streamline your compliance efforts? Are you a SaaS or service organization that handles sensitive or high volumes of customer data and wants to minimize security incidents while meeting contractual obligations? This SOC 2 Guide is designed to help you understand how to structure and implement SOC 2 controls, including:

• A high-level overview of the SOC 2 framework and why it matters for data security.
• Key steps in the SOC 2 journey, from readiness assessments to control monitoring.
• A summary of how SOC 2 fits alongside other frameworks (e.g., ISO 27001, HIPAA).
• Best practices for implementing and continuously improving your SOC 2 program.
• Comprehensive tools to ease the SOC 2 compliance burden

The Importance of SOC 2

Maintaining data security has become a critical priority for organizations that handle customer data or sensitive data. Achieving SOC 2 compliance conveys to customers that a robust cybersecurity program is in place and validated by independent external auditors. When applied thoroughly, the control framework can mitigate security incidents and data breaches and assist in meeting contractual obligations.

What Is SOC 2?

Service Organization Control 2 (SOC 2) is part of the broader System and Organization Controls (SOC) reporting framework developed by the American Institute of Certified Public Accountants (AICPA). SOC 2:

• Focuses on five Trust Services Criteria (TSC): Security, Availability, Processing Integrity, Confidentiality, and Privacy.
• Validates an organization’s ability to protect sensitive data and manage risk effectively.
• Is highly relevant to service organizations that process or store customer data (e.g., cloud services, SaaS providers).
• Demonstrates, via a formal external audit, that your organization meets recognized best practices for internal controls and data security.

SOC 2 is part of the broader System and Organization Controls reporting framework, which includes SOC 1, SOC 2, and SOC 3. SOC 1 focuses on financial reporting controls, while SOC 3 is a more generalized summary report that is typically used for prospective customers. SOC 2 reporting framework evaluates the design and effectiveness of internal controls related to the 5 Trust Services Criteria (TSC): security, availability, processing integrity, confidentiality, and privacy.

Trust Services Criteria Overview

SOC 2 focuses on five Trust Services Criteria, each containing specific objectives and control points:

1. Security (Common Criteria)
   1. Protect information and systems against unauthorized access.
   2. Enforce controls like firewalls, access restrictions, encryption, secure configuration baselines, and user awareness training.
2. Availability
   1. Keep systems operational and accessible as promised.
   2. Includes disaster recovery controls, capacity planning, and monitoring uptime commitments.
3. Processing Integrity
   1. Ensure data remains accurate, timely, and consistent (often called “processing integrity”).
   2. Addresses data validation, data flows, and the reliability of processing outcomes.
4. Confidentiality
   1. Protect confidential data from creation or collection through secure disposal.
   2. Typically includes data classification, retention policies, encryption standards, and secure endpoints.
5. Privacy
   1. Manage personally identifiable information (PII) ethically and responsibly.
   2. Includes consent management, data collection practices, privacy notices, and proper vendor oversight.

Each organization tailors its SOC 2 control descriptions to address the Control Objectives of each TSC to meet its individual business model and regulatory obligations. The Security TSC is a requirement for any SOC 2 report; however, Privacy has become a popular addition recently, especially in the Healthcare and Government contract industries.

TSC controls objectives are a good starting point for any organization implementing policies, but any additional frameworks, such as ISO27001 or NIST CSF, can be used and mapped back to SOC 2.

Core SOC 2 Controls Explained

The first five criteria are objectives derived from the COSO Framework, including:

• Control Environment
• Communication and Information
• Risk Assessment
• Monitoring Activities, and
• Control Activities.

Beyond the COSO objectives, the remaining control objectives include procedures for securing service organizations’ data via managing access, encryption, and application infrastructure. While the criteria objectives are published by AICPA, most third-party assessment Organizations or SOC 2 software can provide a generic list of controls as a starting point.

Security and Access Controls

As a service organization, it is critical to institute security controls ensuring only authorized access from external traffic to your SaaS, whether through an API, OAuth, or local credentials. Having proper controls over these access points, such as password complexity, multi-factor authentication, and reset and identification procedures, is mandatory for SOC 2. Additional ways to meet the security criterion include:

• Firewalls: Implementing proper inbound and outbound connections; using firewalls not only on external traffic but also for internal servers, all nodes (including laptops), and web applications. Designating an allow list is the most restricted and assists in meeting a zero trust model.
• Physical Access Controls: Secure data centers, offices, or server rooms to prevent tampering or theft.
• Encryption: Keep data protected at rest and in transit using the latest encryption protocols.
• Role-Based Permissions: Restricting who can access particular systems or data and reviewing the access periodically as well as having automations in place for disabling users who no longer require access.
• Configuration Management: Having sound procedures for modifications to systems or software with proper reviews, scans, and approvals before merging to production.

Confidentiality Controls

The organization’s ability to protect information designated as confidential from its collection or creation through its final disposition and removal from the service organization’s control. Organizations should start by having a Data Classification policy and appropriately defining all data throughout the organization's ecosystem. Once this is done, the proper controls over systems storing confidential data should be implemented. Confidentiality and Data Privacy Controls include:

• Retention and Disposal Procedures: Outline how long data is kept and secure methods for disposing of or deleting it.
• Vendor Management: Ensure third parties have proper controls that mirror your confidentiality and privacy obligations.
• Encryption: Controls over how data is transmitted or stored on endpoints, such as encryption key rotation, credentials, and device security. This could also include server configurations.

Data Privacy Controls

Privacy criteria control objectives specifically refer to Personally Identifiable Information (PII). The Privacy Category covers communication, consent, and collection of personal information. It also verifies that appropriate parties have access to that information and what can be done with it. Controls for Privacy include:

• Privacy Notices: Clearly communicate to end users and customers about data collection, usage, and retention.
• Consent Management: Track and honor individual preferences regarding the collection and use of personal data.
• Training: Proper education of employees on how to handle and classify data as well as meet privacy regulations, such as HIPAA.

Confidentiality and data privacy controls encompass more than preventing unauthorized access; they also ensure that sensitive data is handled and stored securely throughout its lifecycle.

SOC 2 Type 1 vs. SOC 2 Type 2 Reports

Key Differences

• Type 1: Confirms that controls are in place, but does not attest to how consistently they are executed.
• Type 2: Shows the controls work effectively over a defined audit period, offering a deeper level of trust to clients.

Typically an organization will start with a readiness assessment and then when ready perform a Type 1 assessment with an AICPA Third Party Assessment Organization. Then after control design has been vetted, perform a 6 month or 1 year Type 2 report depending upon the demand and requirements of an organization’s customers.

Learn more about these differences if you’re deciding which type of SOC 2 engagement best suits your needs.

Steps to Implement SOC 2 Controls

Achieving a SOC 2 report involves building a sustainable approach to information security by evaluating your current posture, designing controls, and undergoing a formal attestation by a CPA firm. Below is an overview of key steps.

Readiness Assessment and Gap Analysis

Before finalizing SOC2 controls, most organizations begin with a readiness assessment. This process includes:

• Identify Current State
  • Inventory existing policies, procedures, and technology.
  • Map them against SOC 2 requirements for each TSC in scope.
• Gap Analysis
  • Pinpoint missing controls or suboptimal processes (e.g., insufficient encryption, no documented risk assessment).
• Remediation Plan
  • Prioritize critical gaps and address them first.
  • Set clear timelines and assign responsibilities to relevant teams.

Designing and Monitoring Controls

After fixing any gaps, you can design or refine SOC 2 controls to match your unique risk management profile. Controls should be customized to your organization’s infrastructure, business processes, and compliance requirements.

• Control Documentation
  • Write formal control statements describing how each risk is managed.
  • Include frequency (e.g., monthly, quarterly) and responsible parties.
• Tooling and Automation
  • Deploy systems that automate evidence collection (logs, tickets, user access reviews).
  • Set up real-time alerts or dashboards for crucial metrics (e.g., failed logins, changes to production).
• Ongoing Evaluations
  • Schedule routine checks or internal audits.
  • Document issues and apply continuous improvement.

Effective SOC 2 controls are the result of a thorough readiness assessment, careful design, and continuous monitoring to address evolving threats. Check out more information on SOC 2 compliance for a detailed look at building and maintaining strong internal controls.

What Are Best Practices for Maintaining SOC 2 Compliance?

Completing a SOC 2 engagement is only the beginning. Maintaining compliance requires a culture of continuous improvement, risk management, and incident response preparedness. The following outlines continuous monitoring and culture to implement in your organization.

Culture Campaign

The internal advocate for SOC 2 should invest in spending time with different departments where they may perform controls supporting the SOC 2 report:

• HR who is performing onboarding and background checks
• Legal and privacy officers who govern and oversee privacy and data handling policies,
• IT, Engineering, and Information Security on technical procedures and building security into the design and implementation of features.
• QA, internal audit, and other internal regulatory compliance groups will reduce overhead and align on the goal of continued compliance.

Regular Risk Assessments

Threat vectors and vulnerabilities change frequently, therefore it's important to have scheduled risk assessments at defined intervals or whenever there is a major operational change. While the risk management team may own the process, gathering stakeholder feedback and making them feel heard about the challenges they face in scaling their operations is key to ongoing risk management. If stakeholders are not feeling heard, they are more likely to break from compliance to do their own thing, such as perform technology upgrades (cloud migrations, procure new third-party tools, etc.) without following proper procedures.

Risk assessments should look at:

• External factors that have changed as well, such as regulatory changes (new HIPAA rules, impact of GDPR or other new US Privacy Laws).
• Business expansions (mergers, acquisitions, or entering new markets) and thus ensuring systems for any new service are considered.

Continuous Improvement

• Automation is a core component to improve manual processes. Once solid processes are in place and stakeholder relationships are built, then it is a good time to evaluate the cost-benefit of automating procedures. This may include investing in upgrades that will track meta-data, use it for alerting, block changes from moving to production without vulnerabilities being fixed,
• Involving more stakeholders in Business Continuity to distribute the risk among departments. Conducting periodic table top exercises of your recovery plan or disaster recovery strategy and involving everyone from communications and marketing departments, to legal, account managers, and security.

Maintaining compliance requires continuous improvement of the control criteria and keeping vigilant about security updates. Additional tasks include regularly updating controls and conducting periodic reviews to reflect operational changes.

What Are the Benefits of SOC 2 Compliance?

Enhanced Security and Trust

The goal of completing a SOC 2 Report goes beyond meeting a baseline level of security. Benefits of transforming your organization to a federated policy and compliance framework include:

• reduced overhead,
• reduced risk exposure and
• increased overall competitiveness as a service provider.

By establishing and documenting controls to avoid unauthorized access, data breaches, and security incidents, you show clients and stakeholders that you take data security seriously. This leads to:

• Increased assurance for customers and business partners that your system and organization controls can handle sensitive information.
• A more proactive defense against emerging threats, aided by mature incident response processes. For example, taking on AI threats and the questions clients may have about AI in their services.
• Ability to adapt and align to other frameworks, such as ISO27001, which may be required if your services expand beyond the United States or into other regulated industries such as healthcare.

Competitive Advantage

Organizations that have obtained a SOC 2 report often gain a market advantage:

• Many procurement processes now require SOC 2 Type 1 or Type 2 as a prerequisite.
• Buyers perceive SOC 2 as a distinguishing factor among competing service organizations.
• Credibility increases and sales cycles can shorten when you present a completed SOC 2 report.

Beyond improving data security, achieving SOC 2 compliance differentiates your organization and instills greater confidence in your ability to protect sensitive data.

How AuditBoard Can Help

If you are looking for a comprehensive tool to help manage SOC 2 compliance, consider how AuditBoard’s solutions can simplify risk assessments, automate evidence collection, and streamline reporting.

If you’re seeking efficient tools to manage SOC 2:

• Centralized Documentation: Keep all policies, procedures, and controls in one place to eliminate version confusion. This level of organization is particularly important for businesses juggling multiple frameworks, as AuditBoard’s mapping functionality shows how your SOC 2 controls align with other standards like ISO 27001 or PCI DSS.
• Automation & Integrations: Automate evidence gathering and perform real-time control monitoring (e.g., user activity logs, policy compliance checks).
• Streamlined Reporting: Leverage prebuilt templates and workflows to produce audit-ready documentation with fewer manual steps.
• Expert Support: Gain from dedicated success teams that guide you through readiness, testing, and continuous improvement phases.

About the authors

Paige Martin is a Manager of Product Solutions at AuditBoard. Prior to joining AuditBoard, Paige spent 4 years with KPMG in Atlanta specializing in information technology audits, risk assessments, SOX/ICFR, and SOC Reporting across the Manufacturing, Hospitality, and Technology industries.