What does SOC 2 Type 2 mean?

SOC 2 Type 2 means that not only the IT control system itself is assessed, but also its implementation and effectiveness over a longer period. A SOC 2 Type 1 audit primarily assesses whether a control system is designed to work; a SOC 2 Type 2 audit assesses whether that control system was effective during the period.

What is the difference between ISO 27001 and SOC 2?

ISO 27001 focuses on information security within all types of organizations. SOC 2 has a somewhat broader scope, IT management as a whole, and is specifically intended for IT cloud and service providers. Unlike ISO 27001, a positive SOC 2 audit does not issue a certificate; instead, you receive a detailed report that can be shared with customers.

What is the difference between ISAE 3402 and SOC 2?

ISAE stands for International Standard for Assurance Engagements and is an audit standard for reporting on the control of outsourced processes. An ISAE 3402 Type 2 report assesses how the service provider manages risks associated with outsourced processes. The assessment framework is determined by the outsourcing and the financial processes. In a SOC 2 report, the assessment framework is not outsourcing but information security. SOC 2 reports, therefore, do not focus on financial processes; they focus on the Trust Services Criteria such as security, availability, confidentiality, processing integrity, and privacy within a service organization.

Does every company need to comply with SOC 2?

No, SOC 2 compliance is not mandatory, but it is highly valuable for IT cloud and service providers. They can provide prospective and current customers with clear insight into the quality of their services, without requiring each customer to conduct their own audit.

SOC 2

What is SOC 2?

SOC 2 stands for Service Organization Control 2 and is a framework for auditing information security and data management within service providers. The emphasis is on the management and protection of customer data. The SOC 2 framework was developed by the American Institute of Certified Public Accountants (AICPA) and focuses on five areas:

Security
Availability
Processing Integrity
Confidentiality
Privacy

The driver behind SOC 2 is that an increasing number of organizations are outsourcing the collection, storage, and processing of personal data to cloud service providers. This ranges from Microsoft 365, where Office files are stored in the cloud, to healthcare applications that store and process patient data from healthcare providers online.

As the contracting organization, you remain responsible for how that data is handled. The General Data Protection Regulation (GDPR) provides clear guidelines on which personal data you may have processed, in which cases, and for what purpose. It also defines when and how you must obtain consent and what rights individuals have to access their stored data and have it deleted if desired. Finally, there are guidelines for the measures your organization must take to properly secure all personal data against unlawful use.

This means that when you sign a contract with a cloud provider, you want assurance that your data is secure and that the provider has end-to-end control of data management and protection. Not only technically, but also across processes and the organization. A SOC 2 report provides that assurance. During a SOC 2 audit, a certified auditor assesses the provider’s internal controls for managing the IT environment and all data.

Why is SOC 2 Important?

Because your organization remains responsible for data management, the impact can be significant if your service providers make mistakes:

It starts with the substantial fines that the Dutch Data Protection Authority (AP) and other European privacy regulators can impose when guidelines are not followed and, for example, a data breach occurs. Fines can be as high as 20 million euros or 4% of an organization’s worldwide annual revenue.
In addition, customers can file claims in the event of data breaches, especially if it appears that organizations did not have their data management in order.
This can also cause serious damage to your reputation in the market. Put simply, trust is gained slowly and lost quickly.

An organization can attempt to recover such damages from a provider whose controls were not in order, but success is never guaranteed. A SOC 2 report does not guarantee that issues will never occur in data management, but it helps demonstrate that you have done everything reasonably possible to prevent them.

compliance worden SOC 2

Achieve SOC 2 Compliance

So, how do you become SOC 2 compliant? SOC 2 compliance means that, as a service organization, you undergo an audit performed by an organization certified to conduct SOC 2 audits. The audit results are documented in a SOC 2 assurance report. In addition to information security, the agreed scope determines whether data availability, integrity, confidentiality, and privacy measures are assessed. This is performed in accordance with the SOC 2 guidelines issued by the Assurance Services Executive Committee (ASEC) of the AICPA. As a service provider, you can share the SOC 2 audit report with current and prospective customers to help them evaluate your services.

A service organization can choose between two types of SOC 2 examinations:

A SOC 2 Type I examination assesses the design of the IT service system and the established control measures. This is performed using documentation, interviews, observations, and sampling.
A SOC 2 Type II examination is more extensive because it not only assesses the control system, as in Type I, but also the actual implementation, operation, and results of the applied controls.

With a SOC 2 Type II audit, you assess the effectiveness of the control system. A new audit must be performed annually to determine whether the system functioned properly during the period and whether the controls were effective.

What are the Benefits of SOC 2?

The advantage of SOC 2 is that this rigorous, standardized audit gives all stakeholders insight into the quality of IT services. As a customer, you do not need to conduct your own extensive audit. Instead, you can focus on reviewing the SOC 2 audit results. For service providers, presenting a SOC 2 audit report is a significant advantage.

In addition, such an audit provides the service provider with ample opportunities to improve its own control system and processes. Your organization is fully in control, and you can clearly demonstrate this to your customers.

ISO 27001 vs SOC 2

When we compare ISO 27001 and SOC 2, we see that a SOC 2 report clearly complements an ISO 27001 certificate. Among other reasons, SOC 2 goes beyond security alone, and the assurance report provides deep insight into the organization, its resources, and its processes. A SOC 2 audit report is also increasingly used to demonstrate business continuity by demonstrating operational control.

Tools4ever SOC 2 Audit Attestation

Tools4ever is a modern IAM cloud service provider. Our HelloID solution is an Identity-as-a-Service (IDaaS) offering that enables organizations to consume IAM capabilities entirely from the cloud. Tools4ever manages and continuously develops the platform, enabling customers to focus on using its functionality. Tools4ever uses a SOC 2 audit to demonstrate the quality of this cloud service.

We had the HelloID cloud service assessed through a SOC 2 Type II audit by Brand Compliance. The assurance report demonstrates the quality of our services. The audit report covers the entire cloud service, supplier management, software development processes, internal corporate governance, and risk management processes. You can find more information here about our Tools4ever SOC 2 Type II audit attestation.