The Ultimate Guide To Defining SOC 2 Scope For Your Business

The Ultimate Guide To Defining SOC 2 Scope For Your Business

In today’s rapidly evolving digital landscape rife with cyber threats at every turn, getting certified for SOC 2 compliance is not a “nice-to-have”; it is a “must-have” for organizations looking to establish the credibility of their data infrastructure. Customers are currently hyper-aware of how businesses collect and utilize their personally identifiable information (PII), which makes it essential for companies to maintain air-tight security and ensure their clients that their data is in safe hands. This is where SOC 2 compliance comes in.

The Systems and Organizations Controls (SOC) 2 is a globally recognized compliance framework designed to evaluate and confirm the security, availability, processing integrity, confidentiality, and privacy of systems and data within an organization. However, getting SOC 2 certified can be challenging, especially for small firms. The audit is performed by an external third-party independent organization, typically in several stages. How can you start on the right foot here? By thoroughly defining your SOC 2 scope, of course. 

When getting ready for SOC 2 assessments, defining the SOC 2 scope can be a substantial constraint. Customers relying on SOC 2 reports for making important decisions have difficulties when some organizations make the mistake of just including elements that highlight their strengths. Others need help to balance assessment initiatives and the time and resources available. Therefore, it’s crucial to define the scope clearly. 

A strategic scope for SOC 2 audits is necessary to satisfy evolving requirements and a knowledgeable market. In this blog, we will discuss how to define and disclose the scope of a SOC 2 report and highlight three ways in which you can narrow down your requirements.

Defining Your SOC 2 Scope

The systems and services utilized by the customers who rely on the report should always be covered by a SOC 2 Report. Their expectations, along with the services they depend on the service organizations to offer, are considered when determining the scope. Their software system(s) and the location where their data is processed and kept are typically the focus of that.

The best place to start when gathering information on a customer’s dependency on an organization is understanding the services agreement. Reports frequently leave out customized customer-specific services because they are typically written for a large audience with diverse needs. Furthermore, anything deemed irrelevant to the end users would typically be left out of the reports.

The SOC 2 Trust Services Criteria must concentrate on the relevant system elements supporting those services in accordance with the stated scope based on the scope for the services.

Disclosing Your SOC 2 Scope

Most organizations don’t disclose the scope of a SOC 2 report as they should. Outlined below is the ideal way to disclose your SOC 2 scope:

The main elements of the scope of a report should be noted in the Introduction, Overview, and Scope sections. This contains the principles of Security, Availability, Processing Integrity, Confidentiality, and Privacy Trust Service. According to the standard, the report must include information on the many service types offered and the infrastructure, software, personnel, policies, and data pertinent to those services.

A Software as a Service (SaaS) provider is a straightforward illustration. The software application(s) they generally offer customers, along with all of the stored data, the infrastructure that hosts them, and the staff and procedures that support them, comprise the scope.

The processes are generally based on the requirements of the SOC 2 standard, but for a software company, they also involve software development, customer success, and product management, which might not apply to another sort of service, for instance.

The scope is further described in other sections of the report, such as those that discuss the material sub-service providers such as AWS, GCP, or Azure, which host the infrastructure) and the complimentary user entity controls, which highlight the main duties of the end users for their services. The SOC 2 Trust Services Criteria must concentrate on the relevant system components that support such services in accordance with the stated scope based on the scope of the services.

Defining SOC 2 Complementary User Entity Controls

In addition to the services offered by the organization, statements that make clear what is expected of users are also presented. These are warnings: even if a topic is covered, it might depend on the end user. The capacity to achieve the criterion may be compromised if the end user isn’t doing their part.

For instance, if the service organization provides a system, it may be the obligation of the end users to make sure their system access is kept up to date. Even if the enterprise maintains everything properly, if the end-user does not adequately handle that, data breaches may still happen.

Defining Your SOC 2 Scope

Here are three ways you can narrow down your SOC 2 scope:

  1. Learn about the SOC 2 Trust Services Criteria

The American Institute of Certified Public Accountants (AICPA) defines the Trust Services Principles as they will be used to determine the scope of your SOC 2 audit. Here is how you can choose from among the five Trust Service Criteria (TSC):

  • Security: Systems are shielded from unauthorized access, usage, and modification. This is a mandatory TSC to get a certified CPA audit firm’s completed SOC 2 Attestation report.  
  • Availability: Systems must be operable and fulfil the organization’s obligations and requirements.
  • Processing Integrity: Authorized, timely, and accurate system processing is required.
  • Confidentiality: Any information designated as confidential must be safeguarded appropriately.
  • Privacy: Any personal information must be handled properly when used, disclosed, kept, or disposed of.
  1. Pick relevant TSC Principles Applicable To Your Company

Start by listing all the systems and internal controls you employ that are essential to providing your service. This may include your office’s video security system, Slack, or email. Some won’t have anything to do with accepting payments, but they will still be important for providing your service or handling risks. Be willing to assign tasks because you will need assistance creating this list. Establish the in-scope and out-of-scope systems in a document. Make a brief reason for each item that is out of scope.

Keep identifying out-of-scope systems and the accompanying trust service requirements as much as possible. It is possible to omit systems that handle social media profiles or take lunch orders. Even the majority of HR systems may be deemed out of bounds. Although you work with them to manage payments and leave requests, those systems are not obligated to let you know when they make changes to the functioning or features of the website. Asking these questions in advance can help you avoid spending a tonne of time and effort implementing extra organizational controls during your SOC 2 assessment.

You can further restrict the scope of your SOC 2 report by defining a distinction between systems used in production and those that are not. For instance, any code or systems created for research and development shouldn’t be subject to the same change control procedures as those used for production, which can call for stricter information security guidelines or confidentiality standards. Additionally, even while having a marketing website is essential for your business, updates to that site shouldn’t be subject to the same change control processes as the program that provides your service.

You can take advantage of additional scope exclusions if your company is bigger and more complex. You might restrict the scope to only those divisions or subsidiaries essential to providing your service, for example, if your organization has numerous of them. In the event that you purchase a business, you should determine whether any business units fall under the purview of your SOC reports.

  1. Ensuring Third Party Vendor Management

Also, keep your vendors in mind for their compliance with standards. Use the United States Postal Service to communicate with your customers. However, if you issued them a security RFP, it’s doubtful they would ever reply. The good news is that several companies have made the security-related questions you must respond to as part of SOC compliance publicly available.

Another issue that needs careful consideration is capacity planning. Only those components that are crucial to SOC 2 should be listed. Capacity planning concentrates on your POS systems, inventory ordering software, and payroll systems.

Recovery testing is yet another area where you can set scope limits. It’s normal to feel overburdened once your mind starts to race with all the potential disaster-causing factors. But concentrate on things that happen at least once every ten years. Start this reasoning by ruling out scenarios that could force you out of business—for instance, not paying your AWS payment or having your employees leave in a wave.

SOC 2 Compliance Readiness with Akitra!

Establishing trust is a crucial competitive differentiator when courting new SaaS businesses in today’s era of data breaches and compromised privacy. Customers and partners want assurances that their organizations are doing everything possible to prevent disclosing sensitive data and putting them at risk, and compliance certification fills that need.

Akitra offers an industry-leading, AI-powered Compliance Automation platform for SaaS companies. Using automated evidence collection and continuous monitoring, together with a full suite of customizable policies and controls as a compliance foundation, our compliance automation platform and service help our customers prepare readiness for the SOC 2 compliance standard, along with other security frameworks like SOC 1, HIPAA, GDPR, ISO 27001, ISO 27701, ISO 27017, ISO 27018, PCI DSS, NIST CSF, NIST 800-53, NIST 800-171, FedRAMP, CMMC, and more such as CIS AWS Foundations Benchmark, etc. In addition, companies can use Akitra’s Risk Management product for overall risk management for your company, Trust Center, and AI-based Automated Questionnaire Response product to streamline and expedite security questionnaire response processes delivering huge cost savings. Our compliance and security experts will provide customized guidance to navigate the end-to-end compliance process confidently. 

The benefits of our solution include enormous savings in time, human resources, and cost savings, including discounted audit fees with our audit firm partners. Customers achieve compliance certification fast and cost-effectively, stay continuously compliant as they grow, and can become certified under additional frameworks using a single compliance automation platform.

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