If your company handles any type of customer data, obtaining a SOC 2 report will demonstrate that you value data security and protection. Companies with SOC 2 compliance are likely to close more deals.
But what is the best way to prepare for your SOC 2 audit? Is it a good idea to prepare internally for your SOC 2 audit? Or do you need an external consultant? This article will discuss the positives and negatives of SOC 2 audits in-house.
A SOC 2 audit evaluates the internal controls that govern an organization’s services and data. The American Institute of Certified Public Accountants (AICPA) defines these controls as the Trust Services Principles, which include security, availability, processing integrity, confidentiality, and privacy.
The five Trust Services Principles are explained below:
- Security – Security refers to the safeguards to protect data throughout its lifecycle. The core principle of the SOC 2 is to ensure the security of a service provider’s data and assets.
- Availability – During a SOC 2 compliance audit, auditors examine the availability of your systems to determine whether they are easily accessible.
- Confidentiality – The confidentiality audit examines controls that affect data from its creation, processing, and storage to its final disposal and removal.
- Processing integrity – This principle ensures that data is authorized and distributed to the appropriate parties on time.
- Privacy – This SOC 2 principle addresses data release and destruction and the methods used to collect, use, and retain personal information.
The two types of SOC 2 compliance reports are as below:
- SOC 2 Type 1 – Investigates security controls at a particular time. This audit is performed on security systems.
- SOC 2 Type 2 – Examines the same controls over a longer time (6 to 12 months). It is concerned with the effectiveness of a company’s security operations in ensuring system reliability.
An in-house audit, also known as an internal audit, is an assessment of a company’s financial and operational processes and controls conducted by the company’s staff. The purpose of an in-house audit is to provide management with an independent and objective evaluation of the company’s internal control systems and identify areas where improvements can be made.
SOC 2 reports typically have a one-year shelf life, and are considered “stale” after one year and less valuable to potential customers. This is because SOC 2 reports assess the effectiveness of a company’s controls and processes at a specific time, and those controls and processes can change over time. Conducting an internal audit at planned intervals, such as every 6-12 months, can help a company stay updated with the latest SOC 2 requirements and ensure that its controls are effective and current. Additionally, conducting an internal audit on a regular basis allows a company to identify any areas of weakness or non-compliance and address them on time, which can ultimately improve the chances of passing a SOC 2 review.
Pros of doing SOC 2 Audit in-house
Let’s discuss the pros of SOC 2 audit in-house.
- Flexibility to operate as per your requirement – When preparing for a SOC 2 audit internally, all of your security rules, tests, and evidence tasks are created, which gives you complete control over your SOC 2 in-house project from start to finish. The organization has complete control and does not need to rely on a third-party provider. Another benefit of an in-house audit is managing risks effectively and implementing internal controls. The strength of the internal audit function is critical for the successful implementation of internal controls and ultimately contributes to improved governance and achievement of organizational objectives.
- Better collaboration and control – SOC 2 compliance can involve members from every department in an organization. Internal communication is always less difficult than external communication. You’ll be able to collaborate with everyone involved in your SOC 2 in-house project. With an in-house audit team, the organization should have access to the needed documents and information, which can help in quickly collecting evidence.
Cons of doing SOC 2 Audit in-house
Let’s discuss the cons of SOC 2 audit in-house.
- Time-consuming and involves a lot of hassle – Preparing for your in-house SOC 2 audit involves a lot of manual work. You must create and manage the project’s roadmap, assign task owners, and ensure task completion. Not just that, manual evidence collection also involves a lot of hassle. Every change to a policy or control needs to be built from scratch, which is time-consuming. Finding and managing partners, such as VAPTs, CPAs, etc., takes a long time. Human error is greatly increased when preparing for your SOC 2 audit in-house. You must ensure that no errors are made in all manual tasks. Your auditor will bill you for more hours for each error.
- Employee security training – When doing a SOC 2 project in-house, there will undoubtedly be bumps in the road; it will not be smooth. Your team must be trained on your SOC 2 goals and best practices for dealing with issues regularly. You should implement company-wide employee awareness training to reduce risk and strengthen internal security.
- Requires separate tool for cloud security monitoring – Another disadvantage of doing SOC 2 audit in-house is that you need a separate cloud security monitoring software. With the automation tool, users can keep track of cloud misconfigurations with centralized dashboards, including an automated classification for danger, warning, and secure configurations.
- Costly – SOC 2 isn’t a one-size-fits-all solution. You’ll need someone with a well-developed knowledge of SOC 2 to assist you with your audit journey. Hiring people with the necessary skills, training, and experience can be time-consuming and costly. A full-time hire costs more than $100k. As threats evolve and become more complex, the technology required to defend against them must also evolve, which can be costly.
- Stakeholder management – Task management is another problem when preparing the SOC 2 audit in-house. There is no centralized visibility into what is happening. When working on SOC 2 in-house, you will not have access to any automation. As a result, you’ll have to manually create and maintain all documentation, such as controls, policies, and evidence tasks. Without automation, it is not possible to hold team members accountable.
- Risk Management – When working towards SOC 2 in-house, you will not have access to any automation. You’ll have to manage the risks from scratch manually. You will have to manually create and complete a risk management plan that includes all potential risks associated with your business and its remedies.
- Vendor risk management – There is no automated vendor risk management during the in-house SOC 2 audit. You have to manually send a security questionnaire and analyze the answers. You may have to manually perform all vendor risk assessments if you do not have automation software.
- Audit is very time-consuming – Collaboration with auditors over email is time-consuming. For your SOC 2, you must keep track of all policy and control changes. Sometimes people make changes and then forget to record them. It’s difficult to go back and say who made the change, when it happened, and why.
Scrut software automates everything listed above via in-platform features and integrations.
How Scrut can help in SOC 2 Audit
Going through a SOC 2 audit in-house can be frustrating, time-consuming, and expensive. Your internal auditor cannot be everywhere at all times. That’s where Scrut automation software comes into the picture.
Scrut is designed to make the entire audit process smooth, easy, and error-free. Scrut Automation reduces your SOC 2 compliance burden by combining the most comprehensive automated compliance platform with a seamless audit experience.
Scrut manages everything from cloud risk assessments to control reviews, risk management, employee policy attestations, and vendor risk. The tool also automates tasks such as evidence collection, gap analysis, identifying misconfigurations, and policy centralization, eliminating 70% of manual work.
You will have access to Scrut’s in-house compliance experts, who will guide you through the entire audit preparation process. In addition to our internal SOC 2 compliance experts, Scrut provides access to SOC 2 consultants, auditors, and other professionals. No extra effort is needed in looking for expert auditors for your compliance. Simply collaborate with our auditors from Scrut’s partner network at pre-negotiated rates.
- You can schedule an audit by clicking “schedule an audit.” This will help you identify areas where your organization is falling short.
- Book a comprehensive VAPT by clicking “book a VAPT.”
- You can click “talk to an expert” if you get stuck on a particular topic and want to talk to an expert regarding your issues.
Scrut provides a unified, real-time view of risks and compliance. The tool identifies gaps and critical issues in real time with continuous automated control monitoring. With Scrut, you don’t require a separate tool for cloud security monitoring. Scrut’s Cloud Security gives you complete command of your cloud environment. In minutes, you can connect your entire cloud infrastructure, including AWS, Azure, GCP, and others, to the Scrut platform.
Creating policies from scratch is time-consuming when you first begin your compliance journey. Scrut’s library of 50+ pre-built policies allows users to create a SOC 2-compliant InfoSec program in minutes and guides them to collect what they need to pass the audit and get certified.
The platform allows users to automate all of their compliance activities. It allows seeing the progress and effectiveness of your compliance programs.
The Audit Center dashboard provides a complete overview of your audit, as shown in the screenshot below. SOC 2 compliance involves an annual audit. Our platform can quickly scale up to meet the needs of your company.
When users click on each audit entry in Scrut’s Audit Center dashboard, they can view detailed information about the audit. This information typically includes the audit owner, the person or team responsible for managing the audit, and the data requested, which is the specific information the auditors will need to perform the audit. Users can also view the progress of the audit, which includes the status of each task, such as whether it has been completed or is still in progress.
In addition, users can see information about the specific framework details of the audit, such as which regulatory or industry standards the audit is testing against (e.g., SOC2), which can help ensure that the company complies with those standards. Other details, such as the audit’s date and the auditor’s name, can also be visible in the dashboard.
This level of detail provided by Scrut can be useful for companies.It allows them to stay informed about the audit’s progress and specific requirements and ensure that they provide the auditors with the necessary information on time. It also allows them to quickly identify any issues or nonconformities that may have been identified during the audit process.
Without an automation tool, you’ll have to manage the risks from scratch manually. Scrut Risk Management provides a centralized interface for identifying, assessing, and mitigating IT and cyber risks. It gives organizations the awareness they need to avoid threats and communicates the risk implications on high-priority strategic priorities.
Scrut automates employee information security training by providing a pre-built 30-minute course created by industry experts. The tool equips your employees with everything they need to understand potential risks, avoid lapses, and develop a secure posture.
With Scrut, you can use pre-made templates or create your questionnaire. The tool compares vendors to find the least risky business partner.