A recent survey shows 68% of business leaders feel their cybersecurity risks are increasing. One of the most effective ways to mitigate these risks is by achieving SOC 2 compliance.

For any SOC 2 Compliance, SOC 2 audit reports are mandatory. However, one of the most practical limitations while preparing for SOC 2 assessments is defining the scope of the examination.

Many times, businesses just highlight their strong points, which causes problems for recipients who depend on SOC 2 reports. Others struggle to strike a balance between assessment initiatives and available time and resources.  

SOC 2 audits must be strategically scoped to meet the demands of evolving standards and an informed market.

In this blog, we will assist you in logically and responsibly preparing the SOC 2 scope to meet regulatory obligations, manage risks, and create clarity.

What Is SOC 2 & Its Scope?

SOC 2 (System and Organization Controls 2) is a framework designed by the American Institute of CPAs (AICPA) to manage customer data based on five “trust service principles”: security, availability, processing integrity, confidentiality, and privacy.

SOC 2 compliant includes two major types- SOC 2 Type 1 and SOC 2 Type 2. To get SOC 2 Compliance, several regulations and a compliance checklist are needed that ultimately help SOC 2 for small businesses, startups, and large MNCs to build trust, reliability, and protection from any data breach.

**Understand the difference, understand the difference between ISO 27001 Compliance framework and the SOC 2 Compliance framework, in our latest blog.

On the other hand, the SOC 2 scope of a SOC 2 audit report involves determining which systems, processes, and controls are relevant to these principles and need to be examined to ensure compliance. It identifies the parameters for the internal control evaluation carried out under the SOC 2 audit. Also, It provides clarification on the systems and procedures used by service providers that must be assessed to guarantee the security of client data.

What is Included In SOC 2 Scope?

The scope of SOC 2 includes people, systems, policies, procedures, and services that need to be assessed for efficacy about the five trust principles:

Security: Protection of information and systems against unauthorized access.

Availability: Ensuring systems are available for operation and use as committed or agreed.

Processing Integrity: Maintaining accuracy, validity, and timeliness of system processing.

Confidentiality: Maintaining confidentiality by commitments or agreements.

Privacy: Addressing the organization’s collection, use, retention, disclosure, and disposal of personal information.

How To Define The SOC 2 Scope for Your Business?

Defining the SOC 2 scope is essential for ensuring the accuracy and relevance of your SOC 2 report. The SOC 2 scope lays the foundation for the audit and varies based on various factors like

• type of services
• nature of the organization

However, the fundamental approach for the SOC 2 report remains the same.

Here’s how you can prepare your SOC 2 scope effectively:

• Understand Materiality In Trust Service Criteria (TCS)

Selecting the Trust Service Criteria (TCS) that the SOC 2 audit needs to include should be the first step in establishing the scope. This gives the knowledge of materiality and the scope evaluation is further processes based on this SOC 2 requirements–

Here’s how to select one of the five Trust Service Criteria (TSC):

Security: This service requirement, sometimes referred to as common criteria, must be met.

Availability: This standard pertains to the business if the customers depend on your systems and services being available. It becomes critical to meet the 24*7 need.

To gain clarity, ask the following questions:

• Can I offer services that customers need to be able to access around the clock? (For instance, financial transactions processing.)
• Are there any availability requirements in our service level agreements?
• Are there any hazards in my business that could affect system availability and negatively affect customers?
• Are customers requesting TSC availability?

If you get all the answers positive, the scope of your SOC 2 audit, performed by the auditors will be convenient and likely.

Processing Integrity: The SOC 2 audit scope has to include processing integrity when guaranteeing the authorization, correctness, and completeness of data is crucial to the business.

Follow the given information to make the choice:

• If operations entail handling sensitive data, such as financial or medical
• If precise data processing is necessary for important business decisions
• If the company handles a lot of data and uses sophisticated technologies, such as an e-commerce platform,
• If it is vulnerable to threats that could jeopardize data integrity,
• If customers require processing integrity TSC.

Confidentiality: The confidentiality requirement must be mentioned in the scope of how the company handles sensitive or personally identifiable information that needs to be shielded from unwanted access.

As these questions to determine applicability:

• Does my company handle private data such as passwords, health information, financial records, and intellectual property?
• Does my company need to comply with laws like GDPR or HIPAA that require information confidentiality?
• Have we and our clients signed non-disclosure agreements?
• Do we have any cyber threats to information confidentiality?

Privacy: Personal data is related to privacy. Every company that gathers, handles, or transmits confidential personal data must adhere to the privacy standard.

• Personal data must be protected according to certain data regulations.
• Companies that offer services such as SaaS, healthcare, and e-commerce must protect the privacy of their customers’ data.
• This criterion needs to be taken into consideration if there are substantial risks of data breaches that could affect data privacy.

• Specify Your Service Type

The scope of the SOC 2 audit should specify the services that are required to be covered, taking into account the operations of the company. According to the applicable TSC, any service that includes gathering, storing, processing, or sending sensitive data must fall within the defined scope. These services can be anything and are not limited to IT services, cloud computing, and data hosting.

Vendors or other service providers need to specify tasks and services as they are a part of the sub-service organization. Their access to data, networks, or other resources can help in defining the SOC 2 Scope.

** For which services do you require a SOC 2?

For a particular service, some firms opt to obtain a SOC 2 report.

Google, for instance, offers separate SOCs for Google Workspace, Google Cloud, and other products.

• Identify Policies, Procedures, Systems, and People

The scope of the following includes the data that is gathered, processed, or transferred during the designated services:

Policies-

Policies are rules that specify how security procedures and activities must be carried out within the company. Selecting which of these policies is essential for the SOC 2 audit is key. Data privacy, vendor management, and awareness and training programs are a few instances of policies.

Procedures-

SOPs, or standard operating procedures, are step-by-step instructions for carrying out particular tasks. The SOC 2 scope must include SOPs that outline how to do a security task.

One instance could be the procedure followed in the event of a security incident. Protocols for incident identification, communication, staff duties, remedial activities, and post-event steps may exist in the event of a security issue.

The auditor looks over these protocols to gauge adherence levels by comparing them to real-world procedures.

Systems

A significant portion of SOC 2’s scope consists of physical and technical information systems that are pertinent to the selected criteria. In particular, the hardware, software, and network elements involved in data collection and processing are assessed for potential information security threats.

Systems and controls including intrusion detection systems, firewalls, and access controls are a few examples of what has to be covered under the SOC 2 scope.

Personnel

The employees bear direct responsibility for the development and execution of controls. To make sure the organization satisfies the TSC, it is critical to identify the roles and duties of each individual participating in the process.

SOC 2 covers personnel in charge of access control management, incident detection, security training program implementation, etc.

• Choose SOC 2 Type 1 & Type 2

Both SOC 2 Type 1 and Type 2 reports aim to improve the security environment, but they differ in scope:

• SOC 2 Type 1: Focuses on the design of security controls to meet the chosen trust principles at a specific point in time. It provides a snapshot of policies, procedures, and technologies, ideal for organizations new to SOC 2 audits or needing a quick review to identify improvement areas.
• SOC 2 Type 2: Includes a detailed review of the design and operating effectiveness of security controls over a specified period (minimum six months). This report is chosen to demonstrate the ongoing effectiveness of security controls across the organization, typically conducted annually to maintain compliance.

By following the SOC 2 Type I and II you can effectively define the SOC 2 scope for your business, ensuring a comprehensive and accurate audit that meets your organization’s specific needs and regulatory requirements.

Therefore, it is selected in cases where the company wants to show that security procedures are effective over a six- to twelve-month period.

Every 12 months, organizations that want to maintain SOC 2 compliance need to perform a type 2 audit.

Socurely- Your Trusted Partner For SOC 2 Compliance

Navigating the complexities of SOC 2 compliance can be challenging, but you don’t have to do it alone. Socurely offers expert guidance and support to help you define your SOC 2 scope and achieve compliance efficiently. With tailored solutions and a deep understanding of the SOC 2 framework, Socurely ensures your business meets all requirements while minimizing disruption to your operations.

Conclusion

Defining the scope of your SOC 2 audit is a critical step in achieving compliance and ensuring the security of your customer data. By following the steps outlined in this guide, you can effectively define your SOC 2 scope and prepare for a successful audit. Partnering with experts like Socurely can further streamline the process and provide peace of mind.

FAQ

How often do we need to undergo SOC 2 audits?

SOC 2 audits are typically conducted annually to ensure ongoing compliance.

What happens if the pertinent items are left out of the SOC 2 scope?

If the pertinent systems, controls, procedures, and personnel are left out of the SOC 2 scope, the results could be incomplete assessments, an audit failure or disclaimer of opinion from the auditor, and increased risk exposure.

Can the scope of SOC 2 vary annually?

Yes, the SOC 2 scope will alter if an organization experiences changes to its systems, procedures, and controls, or if a new trust criterion becomes relevant.

What difficulties do enterprises have while establishing the scope of SOC 2?

Identifying the systems, controls, and procedures that must be included, comprehending the application of the criteria, selecting the report type, updating the scope when necessary, and including too much or too little in the scope are some of the difficulties that businesses have while defining the SOC 2 scope.