Don’t cut corners on your SOC audit. You’ll risk harming your business.

For many businesses, especially in tech, financial services or healthcare, demonstrating SOC compliance is essential to winning clients. So you may be tempted to look for a provider who can help you complete a SOC audit as quickly as possible or at a lower cost by using a highly standardized approach.

However, SOC compliance isn’t simply about impressing your customers during the sales process, but strengthening your organization and protecting sensitive data. A highly standardized, lower-cost SOC audit makes it harder to accomplish those latter two objectives, exposing you to financial, operational and reputational harm.

Keep reading to learn more about what an effective SOC audit looks like and how to choose an audit provider that delivers concrete value to your business.

What is a SOC audit?

System and organization controls (SOC) is a cybersecurity and data privacy framework designed to ensure your business has proper controls to protect client or customer data. SOC compliance is assessed through a SOC audit, during which a third-party auditor will evaluate your organization and, if satisfied, issue an assurance report that says you have the right controls in place.

• SOC audits typically assess your compliance with either SOC 1 or SOC 2, which have different purposes.
• SOC 1 is aimed at the needs of financial services businesses and is focused on helping ensure the privacy of customer financial statements and reporting.
• SOC 2 is focused on cybersecurity and data privacy as applied to firms that collect and retain customer data, like SaaS or healthcare companies.
• If you operate in a regulated industry or hold client or customer data, passing an annual SOC audit is essentially table stakes for doing business as a B2B company.
• Likewise, if you are conducting due diligence on a potential vendor, partner or acquisition target, SOC compliance should often be a key component of that activity.

What are the risks of doing a fast, cheap SOC audit?

In recent years, a growing number of auditors have begun offering SOC audits that are fast, cheap and make it easy for you to tell your clients or customers that you are SOC compliant. However, an audit that fails to meaningfully assess your controls leaves you more vulnerable to cybersecurity threats and the consequences of a successful attack.

The risks of choosing an inadequate SOC audit provider include:

• Data breaches: If you don’t have sufficient controls in place, your clients’ data may be exposed to a data breach. But without a comprehensive SOC audit, you may not even be aware that you are unduly exposed, so you won’t be able to take corrective action.
• Financial damage: Without appropriate controls in place, a cybersecurity incident is more likely to cause significant financial harm to both you and your clients. This can be the direct result of an attack, like paying a ransom to end a ransomware attack, or a ripple effect, such as a lawsuit by clients harmed by a data breach.
• Reputational harm: A data breach can impact your reputation. Clients won’t want to risk their data getting exposed, so you may not only lose existing clients who were directly affected, but also harm your future sales prospects or vendor relationships.
• Weaker organizational processes: Finally, a SOC audit may start as a compliance exercise, but it is also an opportunity to assess how your organization actually operates, and identify areas of improvement. If you make your audit simply about quickly checking boxes, you’ll miss out on substantive opportunities to strengthen your business.

Bottom line: A SOC audit should provide value for the business that is receiving the audit. But a quick, low-cost audit will often fail to do that.

What does a comprehensive SOC audit process look like?

During an effective SOC audit, the auditor should make a detailed investigation into your current organizational processes to assess your controls and look for risks. This should include a walkthrough with your auditor to talk about each control you have in place.

Key steps to a successful SOC audit process include:

1. Assess your risks: The auditor should identify gaps in your current controls and opportunities for quality and control enhancements that will strengthen your overall security posture. This gap assessment is part of the planning process essential to a properly performed audit.

2. Verify your controls: The auditor should request data to verify your controls and scrutinize it to help ensure its accuracy.

3. Maintain documentation: Throughout the audit process, the auditor should maintain detailed documentation to support all of the assertions included in their final audit report.

4. Complete an audit report: The auditor should deliver a final audit report that establishes whether your business meets SOC compliance standards and makes recommendations on any needed or suggested improvements.

When evaluating your final audit report, you should consider whether the report covers your basic security needs and if the scope makes sense. Does the report address what you paid for?

How do you choose the right SOC audit provider?

Your SOC audit provider should be licensed, experienced and not operating above capacity. Here’s what to look for:

1. Choose only a licensed CPA: SOC audits should be performed by a licensed CPA firm. Look at license numbers online for both the firm and your individual auditor.

2. Read AICPA SOC auditor reviews: The AICPA maintains a peer-reviewed database of SOC auditors where you can learn more about a potential audit provider.

3. Check for SOC experience: You want to work with an audit provider that regularly does SOC audits.

4. Ask how many audits a potential CPA auditor does each year: Professional audit firms may take on thousands of SOC audits per year, but each individual person who works as an auditor probably shouldn’t do much more than 100 audits per year. Look for an auditor who has experience specifically with SOC audits, but isn’t too overworked to give your audit the attention it deserves.

Done correctly, a SOC audit is an investment in your business that will mitigate risks, attract clients and strengthen your organization. Don’t settle for less than all three.

How Wipfli can help

We perform SOC audits and advise organizations on the SOC compliance of potential vendors, partners or acquisition targets during due diligence. Let’s talk about your needs and how we can help. Start a conversation.

Let’s talk SOC audits

Read more

• When to schedule your SOC 1 or SOC 2 audit
• What's the difference between SOC 1 and SOC 2?
• 7 ways a SOC audit helps your professional services organization