Managing security is not solely about products and technologies. As a security leader in your company, it is important to consider numerous other factors when you decide to set up a Security Operations Center.
A few of the things include - an understanding of the business plan and requirement capability. It also includes the skill set of people who will be part of the Security Operations Center (SOC) for planning the individual and team responsibilities, budget, etc.
With the advancement of technology and boost in digitalization, especially cloud-based setups, the increased risk of security cannot be ignored. Organizations store sensitive data which requires protection against security breaches and data hackers.
As businesses are expanding, outsourcing has become a vital part of every organization. However, it is also necessary to ensure that data security is handled well while outsourcing the operation. With the expanding network vulnerabilities, businesses possess a threat to attacks such as malware installation, ransomware and data theft. This is why information security is a vital part of medium and large enterprises in today’s age.
What is SOC 2 Compliance?
SOC 2 is a voluntary compliance standard for service organizations, developed by the American Institute of CPAs (AICPA), which specifies how organizations should manage customer data.
A SOC 2 report is tailored to the unique needs of each organization. Depending on its specific business practices, each organization can design controls that follow one or more principles of trust. These internal reports provide organizations and their regulators, business partners, and suppliers, with important information about how the organization manages its data.
The intent of SOC 2 is to ensure the privacy and safety of the customers' data. It promotes the five trust service principles of privacy, availability, processing integrity, security and confidentiality of customer data as the core framework of securing data.
Why is SOC 2 Compliance important?
SOC 2 compliance assures your customers have the requirements for protecting their information i.e. the infrastructure, processes and tools. It is determined by a technical audit which is conducted by an outside party. The audit is a clear mandate that the organization is adhering to the specified information procedures and policies. Thus, assuring that organization’s information security measures are in line with the developing requirements of data security in the cloud.
Compliance with SOC 2 offers the following benefits:
1. Improved practices for information security
With improved information security, organizations reduce the risk against viruses and hackers. Thus, enhancing the data protection and security levels, saving them from loss of data or financial damages.
2. Enhanced credibility of the organization
SOC 2 compliance proves that the organization takes responsibility for the protection and security of their data and information, which builds credibility in the industry and attracts new clients.
SOCs 5 Trust Service Criteria (TSC )
The compliance for information security works upon five trust service principles. Let us know more about them:
The principle of security refers to protecting system resources against hackers and unauthorised access. With the help of access control, information leak or mishandling of data can be avoided.
This principle refers to the accessibility of the system, services or products under a contract or service level agreement aka SLA. Here, monitoring network performance and availability, security incident handling, site failover are addressed.
Secured and confidential data allows access to only a specific set of people or organizations. The confidentiality principle promotes encryption as an important feature for protecting information.
4) Processing Integrity
The processing integrity principle aims to address if a system is able to achieve its purpose i.e. to deliver the secured data at its destination within the given timelines. While processing integrity doesn’t guarantee a processing entity, it is possible with the help of quality assurance procedures.
The privacy principle refers to the system’s use, collection, storage and distribution and disposal of data and information in conformity with a privacy notice signed by the organization.
2 Types of SOC Reports
The following are the two types of SOC reports:TYPE I: Defines if a vendor’s system and organizational functions are capable of meeting the relevant criteria of information security.
TYPE II: Provides details of the effectiveness of the system and functionality, described in Type I.
Note: SOC types i.e. Type I or Type II differ from SOC standards i.e. SOC 1, SOC 2 and SOC 3.
Good Read: Compliance Checks That Businesses Need To Follow
Different types of SOC Standards
There are three types of SOC standards, described as follows:
A SOC 1 report is as valid as the Statement on Standards for Attestation Engagements (SSAE 16) report. This means that the report tests the effectiveness of the organization’s system. The system is related to the entities' internal controls that affect the financial analysis and reporting.
Preceded by SAS 70, SOC 2 successfully evaluates, tests and reports on the organization’s control and systems that define the storing information. However, it is not significant to financial control or reporting.
Shorter and public, the reports outlined by SOC 3 are intended for a general audience. These reports differ from the details mentioned in SOC 2 reports but are shared on an open platform, usually on the organization’s website.
SOC 2 Certification
SOC 2 certification, issued by an independent CPA assesses the limitations and extensions upto which a vendor is able to comply with one or more of the trust principles (as mentioned above).
The reports of the SOC 2 certification include the following:
- Management's assertion
- Description of the system
- The opinion letter
- Description of tests of controls and results of testing
- Other information
Difference between SOC 1 and SOC 2
|Purpose||Audit customers of financial statements||Due diligence, oversight, GRC programs|
|Who requires it?||Organizations that need to demonstrate effective operating of internal financial controls and protection of financial information.||Organizations that need assistance in demonstrating that they have implemented security controls for data storage in the cloud, ensuring operational effectiveness and information security.|
|Controls||Controls the processes and security of customer’s financial information||Control any of the five trusted services principles (as mentioned above).|
|Users||Restricted to customers, users’ controller’s office and user auditors||Restricted to management, auditors and regulators|
Security and protection for both financial statements and organizational data are highly important as we discussed in the blog. With SOC 2 compliance and certification, it is made easier and quite firm.
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