How to perform SOC 2 risk assessment: your practical guide to managing risks

The most common question you’ll hear when chasing enterprise deals: “Do you have a SOC 2 report?”

Saying no or simply promising data security won’t cut it.

With growing cybersecurity and supply chain risks, businesses are becoming increasingly wary of whom they associate with. But with a clean System and Organization Controls (SOC) 2 report, you no longer need to rely solely on words. It’s how you prove to prospects, investors, and auditors that you’re committed to providing secure services.

And the foundation of that report? A rock-solid SOC 2 risk assessment. It’s more than just a mandatory step; it’s your roadmap to building a secure and trustworthy business. It allows you to proactively reduce risks and minimize their impact, demonstrating your risk maturity.

Getting it right not only prevents audit failures but also helps you gain a competitive edge and close deals faster.

This guide breaks down the SOC 2 risk assessment process into manageable steps. We cover what it is, why you need it, and where you could go wrong.

What is a SOC 2 risk assessment?

A SOC 2 risk assessment is a structured process that identifies threats to your information systems, evaluates their likelihood and impact, and helps you mitigate those threats with the right controls. It covers risks across your technology, people, and processes, not just infrastructure.

For example:

• A technical risk could be a vulnerability in an open-source library you use.

• A process-related risk may be a former employee retaining system access due to an incomplete offboarding process.

A SOC 2 risk assessment isn’t just paperwork. It’s about proactively predicting what could go wrong and implementing effective countermeasures to prevent it, strengthening customer data protection from the ground up.

The purpose: more than just compliance

While the American Institute of Certified Public Accountants (AICPA) requires a risk assessment for SOC 2 compliance, its purpose goes beyond simply meeting a requirement. It’s a strategic blueprint that shows auditors and customers that you take security seriously.

A well-executed risk assessment program helps you:

• Build trust: Prove to customers and stakeholders that their data is safe with you.

• Strengthen your market position: Attract investors and win enterprise clients with a clean SOC 2 report.

• Prevent reputational damage: Reduce the likelihood of breaches that can damage your credibility.

• Avoid legal and regulatory consequences: Protect your business from fines, sanctions, and lawsuits that result from non-compliance.

The link between a SOC 2 risk assessment and Trust Services Criteria (TSCs)

A SOC 2 risk assessment is the foundation of your entire SOC 2 report. It is a mandatory requirement of the Common Criteria (CC3.1), which is foundational and applies to all SOC 2 examinations, regardless of which Trust Services Criteria (TSC) are in scope. 

Each TSC expands the scope of your risk assessment. Here's how that plays out:

When and how often to conduct a SOC 2 risk assessment

At a minimum, you should conduct a SOC 2 risk assessment once a year. However, the audit focus for the risk assessment process differs for the Type 1 and Type 2 reports:

• For a Type 1 report, the auditor evaluates whether your risk identification process and control design are properly designed at a single point in time. But for a Type 2 report, which evaluates the operating effectiveness of controls over several months, that’s not enough. Auditors look for evidence of ongoing risk monitoring throughout your entire audit window, typically spanning 3 to 12 months.

That’s why a one-off risk review isn’t sufficient. Threats don’t follow calendars. You need to treat risk assessment as a continuous process that evolves with your business.

You should conduct a new or updated assessment periodically or whenever significant changes occur, including:

• Mergers, acquisitions, or new product launches.

• Adopting new technologies, like cloud services or AI platforms.

• Discovering new threats or critical vulnerabilities.

• Changes in business objectives or leadership.

• Key shifts in the regulatory or economic landscape.

Staying ahead of these changes helps you prevent audit findings and build a security posture that scales with your growth.

Why SOC 2 risk assessment is critical for compliance

Risk assessment is a foundational requirement in most Infosec frameworks and standards, whether it’s ISO 27001, NIST 800-53, PCI DSS, or SOC 2. Trying to comply without managing risks is like building a skyscraper without a structural plan. You may get started, but it won’t stand for long.

A strong risk assessment process sits at the core of any effective SOC 2 program. It’s where your compliance journey begins and how you make informed security decisions.

That’s why SOC 2’s governing body, AICPA, requires you to maintain a risk assessment process as outlined in Common Criteria 3 (CC3.1). Simply put, without a documented risk assessment program, you can’t be compliant.

During your SOC 2 audit, expect auditors to dig deep into how you:

• Identify risks specific to your business environment.

• Evaluate their likelihood and impact.

• Prioritize them based on business objectives.

• Implement controls tied to each risk.

• Assign owners to track mitigation and accountability.

Here’s the problem: if your SOC 2 risk assessment misses a threat, you’re likely missing the corresponding control. That creates a compliance gap, and auditors will flag it, potentially resulting in a qualified or adverse opinion in your report.

Want to pass the SOC 2 audit on the first try and prove your risk maturity to customers and investors? Establish a systematic risk management program to minimize costly surprises and ensure a clean SOC 2 report.

Key components of a SOC 2 risk assessment

A SOC 2 risk assessment involves several dynamic elements. Let’s break them down:

Asset identification

You can’t protect what you don’t know you have. The first step is to list and categorize all your critical assets, including:

• Digital infrastructure: Network devices, data centers, servers, and cloud environments.

• Data and information: Customer data, intellectual property, and system logs.

• Software: Core applications, databases, and third-party tools.

• People and endpoints: Workstations, mobile devices, and key personnel with system access.

Threat and vulnerability identification

Next, identify what could harm your assets, both from within and outside.

• Vulnerabilities: Weaknesses in your systems, processes, or people that an attacker could exploit. Examples include unpatched systems, misconfigured cloud services, poor access management, and untrained employees.

• Threats: A natural, unintentional, or malicious act or event that could damage your assets or operations. Examples include malware, ransomware, phishing, insider threats, supply chain compromises, human errors, system failures, and natural disasters.

If left unmanaged, these vulnerabilities and threats could become active risks with a potential for loss or damage.

Risk scoring

Another essential part of a risk assessment is quantifying the risk. Quantify each risk by evaluating:

• Likelihood: How probable is the risk?

• Impact: What would be the business consequence if it materialized?

A SOC 2 risk assessment requires you to consider risk both before and after applying controls. Use a consistent numerical scale (e.g., 1–5) to assign values and compute the scores for risks at both the following levels:

• Inherent risk: The risk level if no controls were in place.

Risk score = Likelihood × Impact (without controls)

• Residual risk: The risk remaining after strong controls are implemented.

Risk score = Likelihood × Impact (with controls in place)

For instance, consider a data breach: its inherent risk might be very high (e.g., Impact 5 × Likelihood 5 = 25). However, when you calculate residual risk, strong controls can reduce the likelihood to low (2). This results in a final residual risk score of 10 (Impact 5 × Likelihood 2), providing an objective way to compare and track risks across the business.

Risk prioritization

With scores in hand, rank risks by severity. This helps focus your time, budget, and resources on what matters most.

Not every risk needs to be mitigated the same way. Based on risk scores, you’ll decide whether to:

• Mitigate (e.g., apply controls).

• Transfer (e.g., through insurance or outsourcing).

• Accept (if the risk falls within your tolerance).

• Avoid (e.g., discontinuing a risky process).

Control mapping to TSC

Finally, document the internal controls you have in place for each risk and map them to the relevant SOC 2 TSCs. A single control can often satisfy multiple criteria.

This mapping is critical—auditors use it to verify that your controls effectively reduce risk and meet the requirements of the TSCs you’ve selected.

For example:

• Access controls primarily support the Security criteria but also help with Confidentiality and Availability goals.

• Data loss prevention (DLP) measures map directly to the Confidentiality criteria.

This mapping ties the entire assessment together, showing not just what risks exist, but how you're actively managing them in a way that meets SOC 2 requirements.

How to perform a SOC 2 risk assessment (step-by-step)

A SOC 2 risk assessment is the foundation of a successful audit. But more than that, it helps you make smarter security decisions and reduce business risk, long before an auditor shows up.

Here’s a step-by-step breakdown of how to perform a SOC 2 risk assessment:

Step 1: Define scope and objectives

Start with your business objectives. If you’re not tying risk to real obligations, you're guessing.

Begin with your service obligations—commitments you’ve made in contracts and SLAs with your clients. Next, define the technical and operational requirements needed to keep those promises, and map them to the TSC requirements.

While Security TSC is mandatory, carefully select the other relevant TSCs that align with your business goals and service commitments.

For example:

• If you’ve committed to 99.9% uptime → prioritize Availability TSC.

• If you need accurate and consistent data handling → add Processing Integrity. 

The selected TSCs will constitute the scope of your SOC 2 risk assessment and audit.

Step 2: Build or reference your asset inventory

You can’t assess risk without knowing what’s at stake.

Compile a list of all your in-scope critical assets that could be at risk. And classify your data based on its level of sensitivity and the impact on your business if exposed or stolen. Don’t leave a blind spot; it could backfire in the most unexpected ways.

You could do it using spreadsheets, but that would mean version issues, errors, inconsistencies, and time-consuming manual labor.

Alternatively, you can use a compliance automation platform like Scrut. It connects with your tech stack, including on-premise systems and cloud environments, to automatically discover and manage assets, saving significant time and effort. It also automatically scans and categorizes data by risk and sensitivity across all your assets.

Step 3: Identify potential risks and categorize them based on TSCs

This is the most vital step in your SOC 2 risk assessment process. With your at-risk objectives and assets listed, start brainstorming the potential internal and external threats that could harm them. 

Note down every possible risk—whether small or large, likely or unlikely—that applies to your specific organization, aligning it with the applicable TSCs.

Here are some real-world risk examples mapped to relevant TSCs:

• A ransomware attack encrypting production servers, causing an extended outage. (Availability, Security)

• An employee committing financial fraud. (Security, Processing Integrity)

• An attacker compromising a critical third-party tool that you use (e.g., payment API). (All TSCs)

• A phishing attack leading to the theft of credentials and personal data. (Security, Confidentiality, Privacy)

Step 4: Evaluate existing controls

Now, match every risk you recorded in the previous step with the controls you’ve currently implemented. This helps you identify every risk that lacks sufficient controls and decide whether to implement additional controls or treat it differently.

Even if you have controls in place, assess whether they’re appropriately designed and functioning as intended. Finding any weaknesses means there is a control gap that you must address promptly.

Step 5: Assign risk scores to make data-driven decisions

No control is 100% effective; some level of risk will always remain. A firewall is supposed to block malicious traffic, but some attackers might still get through.

These leftover risks are your residual risks. Quantify each residual risk based on its applied controls, likelihood of occurrence, and its potential impact on operations. And finally, based on the residual risk score, decide whether further treatment is needed or the risk can be accepted as is.

This will answer your question, “Is this level of risk acceptable for our business, or do we need to do something about it?”

This helps you prioritize urgent risks and apply effective treatment to minimize their impact when they occur.

Step 6: Document and report

Clear, detailed documentation is critical for a smooth audit. It signals your commitment to risk management and strengthens your case during auditor reviews.

Start by turning your risk analysis into a live, actionable risk register—your single source of truth that tracks every identified risk across its lifecycle.

Your risk register should include:

• Each risk with its description, score, and priority.

• Existing controls mapped to risks.

• Control gaps and strategies to bridge them (risk treatment plan).

• The owners and timelines for these actions.

Next, create a formal Risk Assessment Report using the data in this register, and present it to leadership for approval. This formal document is non-negotiable, not only for auditors but also for enabling informed, organization-wide decisions on risk mitigation.

Step 7: Execute the risk treatment plan

This is where strategy turns into action.

Treat each risk based on its score and business impact. Assign ownership, define next steps, and set realistic deadlines to keep progress on track.

Your risk treatment options are to:

• Reduce the risk, by strengthening existing controls or adding new controls to prevent its occurrence or minimize its impact.

• Accept the risk, by formally deciding to take no further action, typically for low-impact risks where mitigation costs outweigh potential loss.

• Transfer the risk, by shifting the consequences to a third party (e.g., cyber insurance).

• Avoid the risk completely, by choosing not to perform a risky activity (e.g., not doing business with an unreliable vendor).

Common mistakes to avoid during a SOC 2 risk assessment (with best practices)

Even with a rigorous SOC 2 risk assessment program in place, common pitfalls can derail your audit and stall growth. Employing the following industry best practices can help you avoid mistakes and stay on track:

Keep documentation updated

Old evidence is audit kryptonite. Auditors won’t accept your risk register or risk assessment report if it is dated six months before the audit window closes.

Best practices:

• Use automation tools to regularly monitor controls, identify compliance gaps, and mitigate them with evidence of every activity.
• Regularly review and update your risk register with version control and change logs to ensure they demonstrate ongoing efforts.
• Schedule risk review meetings every quarter or after any significant business changes, with documented management approval.

Involve cross-functional teams

A SOC 2 risk assessment isn’t just an InfoSec problem. Various risks are spread across different business functions. For instance, HR tackles insider threats, IT manages server crashes or cloud misconfigurations, and the Finance team addresses financial fraud or billing errors.

But aligning teams is hard. It takes consistent effort to drive awareness and build a compliance-first culture.

Best practices:

• Involve the head of every business unit in the SOC 2 risk assessment process. Leverage their expertise to identify and analyze domain-specific risks.
• Establish a formal Risk Committee comprising key personnel from all departments that meets regularly to review the risk assessment process.
• Assign risk owners from different units to each significant risk, ensuring accountability across cross-functional teams.

Don’t ignore third-party/vendor risks

Vendors can be your biggest blind spot.

From cloud storage and to payroll, they often have access to your critical systems and data, which means you inherit their risks.

This isn’t a call to cut ties, but a prompt to assess them rigorously.

Best practices:

• Ask for a SOC 2 report (or equivalent) before onboarding a vendor. If unavailable, vet their security practices in depth. 
• Conduct a thorough vendor risk assessment, especially for those with access to sensitive data.
• Bake in contract clauses for breach notification, audit rights, and secure data handling. 
• Schedule periodic reviews for high-risk vendors to ensure they remain compliant throughout your relationship.

Avoiding these mistakes doesn’t just help you pass the audit. It makes your business more resilient, accountable, and ready to scale.

How tools like Scrut can help you with a SOC 2 risk assessment

Many activities under a SOC 2 risk assessment are repetitive and time-consuming: managing assets, scanning for vulnerabilities, maintaining the risk register, mapping controls, and collecting evidence.

Doing this manually might seem low-cost, but it often leads to missed risks, costly errors, and scaling nightmares. It also places the entire burden on your team, leaving them burnt out and unable to perform high-value tasks.

But there’s a better way: compliance automation software.

Several automation platforms can help automate and streamline your SOC 2 risk assessment process. These platforms connect to your tech stack to continuously monitor controls, automatically collect evidence, and provide pre-built risk registers. This reduces manual work and keeps you audit-ready at all times.

For instance, the Scrut platform is designed to simplify SOC 2 risk assessment for companies of all sizes, from quickly scaling startups to large enterprises. It integrates risk management directly into your compliance program, creating a single source of truth for simplified audits.

Scrut automates end-to-end risk management with features that scale as your business grows:

• Automated asset discovery to map your entire digital infrastructure.
• Frequent vulnerability scanning through integrations with your tech stack.
• Controls pre-mapped to multiple frameworks and regulations, including SOC 2, ISO 27001, HIPAA, GDPR, and more.
• Daily control monitoring to identify and mitigate gaps before they become a problem.
• A centralized risk register with pre-built risks, custom creation, and automated scoring.
• Simplified workflows to assign mitigation tasks to owners and track progress with automated reminders.
• Automated evidence collection from your business apps into a central hub.
• One-click, audit-ready reports generated from a central dashboard.

Manual risk management is unsustainable in the long run. Embracing automation builds a proactive culture around compliance, enabling you to achieve and sustain it over time.

Make compliance a catalyst for growth with Scrut. It simplifies your compliance process, turning it from a barrier into a strategic business enabler.

Ready to see how automation can streamline your SOC 2 risk assessment? Schedule a demo with Scrut today.