Service organizations and businesses are working in an increasingly regulated environment, and many organizations are now being required to complete a SOC audit for the first time.
Though the process may seem intimidating, partnering with the right CPA firm will guide you through becoming SOC compliant and even solve possible risks or issues before the audit.
What will your first SOC audit look like? The SOC process begins with your preparation.
Determine The Scope And Type Of Your First SOC Audit
A crucial step in preparing for your SOC audit, of either type, is deciding the scope of the audit. Which process, system, or services are the most important to your customers or clients that should be the focus of the audit?
What getting ready for your first SOC 1 audit, your organization will need to decide on control objectives for each service, process, or system in the scope of the audit. These objectives determine the full scope of the audit. Control objectives are the goals that your organization completes through control activities. Those control activities are the procedures your organization has in place to ensure that your management directives are being properly carried out.
Preparing for a SOC 2 audit requires you to choose which trust services categories are relevant to your business and customers. These trust service categories are security, availability, confidentiality, processing integrity and privacy.
The CPA firm you choose to partner with for your SOC audit will not determine the scope of the audit themselves, but they will provide advice and guidance on which objectives you should consider.
Evaluate Your Current Processes
For either SOC audit you will need to look over which internal controls you already have in place. For SOC 1, you should identify the processes that are used to meet the control objectives you have set. For SOC 2, you should review SOC framework and compliance to understand its requirements for your organization in the scope that you have set.
An important first step is knowing which control processes are in place so that you can identify any gaps in control or security where the processes do not meet all the SOC requirements or your control objectives.
Afterward, Listing your control activities and mapping them each to the framework or objective that they apply to then have management describe your controls and your organization can be an extremely helpful step in having a successful SOC audit.
Evaluate How Ready You Are For Your First SOC Audit
Before you SOC audit starts you need to evaluate your readiness. Are your internal controls doing what they need to? Do you have records of activities? Do you have logs and information about the reporting period that is being covered by the audit?
Do your customers or clients require a Type 1 or Type 2 report? A type 2 report tests the internal controls of your organization in a specific point in time, while a Type 2 report tests those controls over a period of at least 6 to 12 months.
Type 2 audits are more rigorous, but they provide clients and customers with the greatest level of assurance of their data security and your organization’s internal controls.
Companies will often complete a Type 1 SOC Audit as their first SOC audit. The knowledge and adjustments made during the Type 1 process can then be used to strengthen controls for the future more intensive Type 2 audit.
Your First SOC Audit
So what will the SOC Audit be like after you have prepared?
first step is typically three days of on site walk-throughs. During these control owners are interviewed so that the auditor understands the identified processes and what is available for testing. After this step, management has to fill out two detailed request lists prior to testing.
These requests identify documents that will be used during the testing process. Some documents are gathered before on-site walk-throughs and others are collected on site.
The request lists also identify which areas of the organization need to have interviews to cover them. The business must then identify which employees are to be interviewed for each of these areas.
The SOC process
The testing process generally takes 1-3 days and what goes in to the process depends on whether you are completing a Type 1 or Type 2 SOC audit.
During a Type 1 audit, evidence must be provided that internal controls are present and effective as of the day of the audit. This evidence could come in the form of screenshots showing properly configured passwords on important systems, or proof of a system to document system access and approval of access.
During a Type 2 audit, evidence must be provided that internal controls are present and effective and have been for the 6-to-12-month period. Evidence of this could come in the form of employee hiring records during this period and their system access request forms.
At the end of the week an exit meeting is conducted. In the exit meeting report findings are reviewed, outstanding items that have not been provided are communicated, and a timeline for completion of the report is discussed. This meeting also allows any members of the organization to have questions answered or concerns addressed.
Are You Ready For Your SOC audit?
Contact us today to get started on your first SOC Audit!
