SOC 2 Trust Principles

SOC 2 is the most widely used standard to measure and monitor an organization’s information security. It provides a set of principles that are proven to lead to sustainable competitive advantages in the marketplace. It was developed by the American Institute of Certified Public Accountants (AICPA) to certify that service organizations meet specific internal controls standards. Anyone can request a SOC 2 compliance report, and there are no adverse effects because the reports are purely informational. In addition, any person or company can participate as a client, supplier, or end-user.

SOC 2 can be thought of as a set of pre-agreed rules and procedures, which allow certified entities such as cloud vendors to disclose audited financials. The basic idea is that SOC 2 will enable companies to acknowledge the existence of their data centers and give cost estimates for them. Additionally, it offers an improved level of legal protection for companies (some might say “enhanced liability” protection) that move their data to cloud vendors with a SOC 2 certificate.

SOC2 is important for several reasons. First, many of the largest enterprises are either already using cloud services or plan to do so soon. That is especially true for large companies such as GE or Boeing, which have been shifting many of their internal workloads to clouds. Second, SOC 2 is used as a symbol of trust by third parties such as investors. Because of this, companies can benefit from the enhanced level of legal protection that comes with SOC 2 certification.

The service component is a significant distinction of a SOC 2 compliance report and addresses the fundamental change in business processes over the last decade. Technology services used to be aligned with product sales activity, but today technology services are being “outsourced” for companies’ day-to-day operations.

As a result, you may want to request a SOC 2 compliance report as part of the vendor selection process. In addition, if you are a vendor being considered for providing technology services to a client, the SOC 2 compliance report will be one component in that decision-making process. The report can confirm that your company’s governance and operational controls are adequate to support a client relationship with the company.

SOC 2 Trust Principles

The five principles of trust are competence, integrity, availability, confidentiality, and security. The first four principles are referred to as the “trust service principles.” The fifth principle is related to information technology. When fully implemented, these five principles result in an environment with sustainable competitive advantages. Competence requires that organizations employ knowledgeable individuals at all levels of the organization. Integrity refers to the organization’s adherence to a set of values, both internal and external. The third principle is about availability, which requires that the service auditor has access at all times for independent evaluation of controls in place. Confidentiality is also critical: inappropriate release of sensitive information could affect an individual or even an entire company. Finally, security is all of the steps taken by an organization to ensure compliance with confidentiality and other privacy rules.
The five principles are listed in a hierarchy, which implies that when one or more trust service principles are not satisfied, organizations should work on fulfilling the overriding principles. For example, if an organization does not have security, its confidentiality may be at risk.
SOC 2 compliance is based on these five principles. It gets measured against a defined set of criteria, which leads to the development of a SOC 2 compliance report for customers to review. For a SOC 2 report, these principles are translated into controls to be tested by the service auditor.

The Most Common Myths about SOC Compliance
Myth: My company is too small to hurt if I don’t comply.
Facts: You may think that your company is just too small to bother with compliance, but the reality is that any negative attention could be detrimental to your reputation and business. If you are audited, not only will it cost a great deal of money – it also will reflect poorly on both your company and its customers who do meet these requirements.
Myth: I can fix everything later.
Facts: If you’re not ready to comply, then start now because things are only going to get more complicated. The time to fix your processes is before you are audited.

Myth: I don’t have any customers, so why should I comply?
Facts: You may not have any customers now, but there will be some level of compliance when you do get one. The best time to learn about and implement the necessary levels of security is at this point, before an audit.
Myth: It’s too expensive, or we need to keep our options open.
Facts: The cost of remediation may seem like a lot in the short term, but if a service contract has a termination clause, that could cost far more money than fixing the problem now. When you know you have an audit, it’s time to get on top of compliance.

Myth: I have a small company and don’t want to spend hundreds of thousands of dollars to comply.
Facts: When you can prevent the fines for non-compliance by spending money up-front, it’s definitely worth the cost. If your organization is compliant now, there will be no penalty when you are audited.

Myth: You don’t need an expert – do you have any good friends that know the law?
Facts: You may think you know the law, but most individuals are not experts when it comes to technology. When it comes to your company’s reputation and IT security, you should have a professional team do the work.

The SOC 2 Trust Principles are paramount to any business that values its customers and reputation. If you want a competitive advantage, your organization must comply with these principles to maintain integrity, security, confidentiality, availability, and competence. Our team of experts can help you comply with SOC 2 requirements and establish a foundation for future growth.

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