A complete SOC 2 compliance checklist for SaaS companies

By Ashley Kemper
November 15, 2022

The rise of SaaS businesses and cloud computing has increased the need for strong network and application security. Meeting security compliance standards and taking proactive steps toward improving your security posture is now essential to protect your business, partners, and customers. But it’s easier said than done. 

Following an already-established security framework can be a great way to stay on top of your security needs. That’s where SOC 2 comes in. This security framework allows you to audit your systems and processes and dive deep into any potential issues. Following a checklist for your upcoming SOC 2 compliance audit will ensure that you are prepared and ready to take on this feat and prove you are SOC 2 compliant.

What is SOC 2?

SOC stands for System and Organizational Controls. A SOC 2 is a voluntary compliance standard established by the American Institute of Certified Public Accountants (AICPA). These guidelines specify how businesses and organizations should manage their customer data. They also help you understand how to improve functionality in your business and protect yourself in the event of a data breach.

The assessment framework used in SOC 2 is based on the Trust Services Criteria (TSC):

  • Security
  • Availability
  • Confidentiality
  • Processing Integrity
  • Privacy

These trust service principles are the cornerstone of the compliance standard, and provide a level playing field and help create the SOC 2 guidelines used in the audit.

What is a SOC 2 audit?

A SOC 2 audit is a process performed by independent Certified Public Accountants (CPAs) or CPA organizations. Certified auditors have technical expertise, certifications, and training to conduct the audit accurately.

The SOC audit is important to ensure that your business manages customer data safely within your cloud system. It also helps you build trust with your stakeholders and customers by proving that you take their data and privacy seriously. The result of the SOC 2 audit, the SOC 2 audit report, is evidence that you have the right cloud security and risk management processes in place.

As your business grows, prospective clients may require you to share your SOC 2 report with them, so be sure to keep it on hand. 

A step-by-step breakdown of a SOC 2 Audit

Before we dive into the SOC 2 compliance checklist and the different risk management steps you need to follow, let’s begin by breaking down the SOC 2 audit process. This will help you better understand the compliance audit and the common criteria it will examine.

1) Auditors start the process with a security questionnaire

The first step of the SOC 2 audit is a security questionnaire, which might contain questions regarding:

  • Company policies
  • IT infrastructure
  • Systems and controls
  • Internal procedures

Security questionnaires can be lengthy and time-consuming to fill out, but they do provide  basic information on your team's security and readiness. 

2) Auditors will ask your team to gather evidence and documentation

The next step in the audit process is to gather compliance information and documentation on your controls. All of your policies, controls, and evidence should be well documented and shareable with your auditor. If you aren’t sure what the differences are in these documents, your policies are what you say you do, your controls are how you do it, and evidence collection is proof that you are doing it. 

The auditor will take a look at your documents, controls, and evidence and make sure that everything matches up. They will also examine the processes you have in place, if they are active and if they would work to prevent a possible breach. While this might seem intimidating, it will help ensure that you're meeting proper security measures and properly documenting your security controls.

3) Evaluation process begins

After gathering documentation, the auditors will ask leaders and owners in the business to explain each process. This helps auditors review your business processes, understand your documentation and evaluate your leaders' knowledge of your processes. Timelines for your SOC 2 evaluation are going to vary depending on organization complexity and if you are pursuing a SOC 2 Type 1 or Type 2, but we’ll get into those differences below

4) Auditors will ask your team for a follow-up

The next step after the evaluation phase of the audit is to follow up on any questions or concerns. The SOC 2 audit is a complex and intensive process. As the auditors dive into your documentation and uncover evidence, there will be a lot of back and forth.

Don’t be immediately alarmed when the auditors reach out to your team for additional information — this is standard in the audit process. They might even give you some quick pointers on things you can fix before they finalize their reports. This way, you can address your system and organizational controls before they become an issue with your security practices and a “finding” in your SOC 2 report.

5) Review the finalized SOC 2 report

The final step in the audit process is receiving the finalized SOC report. This audit report will contain the auditor’s opinion on your protocols and readiness. They will match your internal controls to the trust principles and say how well you have met the guidelines.

SOC 2 compliance checklist

The SOC 2 audit is a complex and complicated process. However, preparing for the upcoming audit can be just as time-consuming and involved. This is why having a SOC 2 checklist on hand can be extremely helpful for your planning process.

Download the free SOC 2 compliance checklist

Here are the tasks you need to accomplish before your audit to get the best results:

Choose the right type of SOC 2 report

The first part of your checklist is to determine what type of SOC 2 report you want to undergo. There are two types of SOC reports that you might want to explore: Type 1 and Type 2.

  • SOC 2 Type 1: This type of SOC 2 audit looks at how well-designed your controls are. It examines the effectiveness of those controls at a single point in time. It’s a great starting point to begin your SOC 2 experience and shows compliance intent to your stakeholders and customers.
  • SOC 2 Type 2: The second type of SOC 2 report examines the design of your controls over a longer period of time, typically between three months and a year. Essentially, it looks at your controls in action rather than just the design effectiveness. A Type 2 report typically takes place after the Type 1 report is complete and builds off of the information gathered in the first stage.

Determine the scope of your audit

The next item on the compliance checklist is to define what the scope of your audit is going to be. This means looking at the TSC principles and selecting the criteria you want to use. You’ll always be using the “security” criteria, but you can streamline your audit by selecting the other elements based on your needs such as:

  • Availability is a great principle to select if you want to reassure your customers about your downtime and available time.
  • Confidentiality helps you examine protected customer data, such as non-disclosure agreements (NDAs) or other confidential documents.
  • Processing integrity helps you determine if you are able to execute operations like payroll, tax processing, workflows, financial processing, and financial reporting.
  • Privacy should be included in your audit if your customers have PII data like birth dates, social security numbers, or healthcare information that falls under HIPAA regulations.

Run an internal risk assessment

The next step in the process is to run an internal risk assessment. This includes looking at potential threats to your business and critical systems. During this phase, you might want to look at your vendor risk management protocols, analyze the potential risks for each threat, and examine your plans for risks.

This is a great place in the checklist to start looking at ways you can improve before the audit. If you are missing any key components or have holes in your systems, you can implement new processes immediately. That helps you prepare for the audit and avoid potential ramifications to your end report.

Examine your procedures and execute a gap analysis

The next part of the checklist is running a gap analysis. This is the stage where you examine your current procedures and see how they compare to the SOC 2 compliance requirements. This allows you to critically examine your policies and controls and see how they stack up to the guidelines. If major differences exist between your protocols and the SOC framework, that’s a gap in your process.

Remediating those gaps before the audit helps your team better prepare for the auditor’s questions. It also allows you to make sure your structure is clearly defined. You can start asking yourself serious questions about your readiness and procedures before those questions come from the auditor.

Align and deploy controls based on the TSC

Since you have already selected your TSC principles, you can move on to the next stage: looking at the specific criteria needed for each element and see if you have controls for those guidelines.

The guidelines you pick will differ based on your business size and growth stage (for example, startups will have different requirements than major enterprises). However, you need to know what is expected from your business before the audit begins.

Create a readiness assessment

After you run your gap analysis and determine your TSC goals, it's time to move on to the readiness assessment. This is sort of like a practice run of your official audit, where you can hire an independent auditor to come through and see if you are meeting your requirements.

The independent auditor will go through your processes and documentation just like the real auditor and help you identify weaknesses. Your readiness assessment gives you an idea of what areas the official audit will look at and helps you identify potential risk areas.

Authorize a certified auditor to complete your SOC 2 audit

The next step in the checklist is to get your official auditor in to complete the SOC 2 audit, where they'll come in and run through the steps above. They'll spend a while reviewing your processes and documents and asking you and your team plenty of questions.

At the end of the audit, the auditor will release the report and let you know how you did. If you are doing a Type 2 audit, this process could take over a year as the auditor examines your processes over time.

Roll out a robust continuous monitoring process to stay compliant

The final step in the checklist is to create a continuous monitoring process. You don’t want to get your results and then get too comfortable — security protocols need regular updates as cloud computing develops and becomes more complex.

By having a process in place to remain compliant and improve your workflows, you can ensure that you are protecting your valuable data. Make sure your processes are scalable to help you grow and develop without holding you back.

SOC 2 compliance made easy with HyperComply + Drata

SOC 2 compliance is an established framework that can help your business audit your organization from top to bottom. By following the SOC 2 checklist and launching a SOC 2 audit, you can ensure that your processes and systems are secure, providing peace of mind to stakeholders, customers, and employees. We recently announced our partnership with SOC 2 provider Drata, so customers can achieve SOC 2 faster than ever.

At HyperComply, we understand the need to comply with different security protocols and ensure your business is safe from potential breaches and attacks. Get started for free today to see how we help with SOC 2 by providing fast and simple security reviews, vendor risk management, custom security knowledge bases, standardized security processes that scale with your company — and much more.

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