Compliance vs Security: What’s More Important In Your Business?

Introduction: –

Compliance and security are two of the most important aspects of any business. However, the question of which is more important is a difficult one to answer. Compliance is necessary to ensure that your business is following all the regulations governing it, while security protects your company from potential outside threats. While your business must have both compliance and security measures in place, you may have to prioritize one over the other depending on your specific situation.

 

Compliance: –

Compliance is key when it comes to data security. By following the guidelines set forth by organizations like ISO and NIST, as well as complying with federal laws like SOX and HIPAA, businesses can protect their customers and their data.

Soc compliance: – The Sarbanes-Oxley Act was a federal act that was passed by Congress in 2002 to prevent corporate fraud. SOX compliance is overseen by the Security and Exchange Commission (SEC) and includes a variety of rules and regulations for financial reporting, record keeping, and accountability. The cybersecurity dimension of SOX includes regulatory standards for record-keeping, the implementation of strong internal controls to prevent fraud, and IT infrastructure regarding financial data.

Hippa compliance: – The Health Insurance Portability and Accountability Act, passed by the Department of Health and Human Services Office for Civil Rights in 1996, protects citizens’ individually identifiable health information. HIPAA contains three overarching “rules”: the Privacy Rule, the Security Rule, and the Breach Notification Rule. These regulatory standards ensure that healthcare organizations and their business associates know how to handle patients’ sensitive data. PHI is formally defined as protected health information under HIPAA.

ISO Compliance: – The ISO is a Geneva-based NGO that publishes well-known standards. These standards are known for consolidating best practices into easy-to-understand frameworks. The ISO has released around 22,000 standards, including ISO 27001, their standard for developing information security management systems (ISMS). ISO 27001 outlines specific strategies and checklists for creating strong security measures across an organization.

Read our latest blog for HITRUST 

 

Security: –

Security is the term used to describe the systems and controls in place to protect your company’s assets. Security tools are in place to prevent unauthorized individuals from accessing your company data, whether through a cyber-attack, leak, or breach. Security practices also provide a protocol for how to handle a security incident in the worst-case scenario. Here are some common categories for security tools:

IT Infrastructure: – There is no question that compliance is critically important for businesses. But often, security is prioritized over compliance, putting the business at risk. To make the best decisions for your business, it is important to understand the difference between compliance and security, and the risks and benefits of each.

Network Access: – It can be difficult to find the perfect balance between compliance and security, but with the help of identity access management tools, your business can stay safe and compliant. IAM tools can help to secure your network by regulating access and providing tight security protocols.

Authentication: If you’re a business, you know that compliance and security are two of the most important things you need to focus on. But what’s more important: compliance or security? It’s a tough question to answer, but with 2FA and MFA, you can have the best of both worlds. These tools offer an extra layer of protection that make sure your data is safe and compliant.

User Training: – Users are the cause of most information security incidents. Security professionals know that human error can be prevented through proper training. Employees need to be trained to identify and report phishing attacks, as well as understand how to create and implement a strong password. User education is an important part of any security program. Luckily, security educators are developing engaging and interesting training programs to help users get more invested in security and see it as a necessary part of their work.

 

The Importance of Both Compliance and Security: –

There are two important aspects of security and compliance that are interconnected: security and compliance. Security is the systems and controls put in place by a company to protect its assets, while compliance is meeting the standards that a third party has set forth as best practices or legal requirements. However, they are different in a few ways. For example, security is more preventative, while compliance is reactive in nature.

There are several standards and laws that businesses must adhere to to ensure the security of their data. These measures may be automatic for some companies, but compliance offers strategies to bring your business into alignment with best practices and the law. By complying with industry standards and regulations, you can protect your company from potential fines and penalties. Security and compliance are both important risk management tools. They help to protect your organization from potential harm by ensuring that your systems are secure and following regulations. You can use a third-party resource or standard protocol for security, or you can create a patching strategy for vulnerabilities. Either way, security, and compliance are essential components of risk management.

Ideally, a business’ security measures and compliance needs will be in alignment, but that is not always the case. Sometimes, security measures have been implemented, but not all of the boxes have been checked for compliance needs. For example, you may have invested in antimalware, but you haven’t trained your employees in NIST password guidelines and best practices. You may have satisfied one compliance framework, but if your organization is lacking cohesiveness, you could be at risk. Say, for example, you’ve implemented the PCI DSS security standard, which requires multi-factor authentication for accessing card payment data. However, you haven’t used those same authentication tools for other parts of your business. Organizations that lack a clear authentication tool for accessing cloud computing resources are still PCI DSS compliant. However, they may have security gaps in other areas. A comprehensive security assessment is necessary to identify these needs and ensure that compliance and security are aligned. Good governance across all aspects of the business is key to achieving this goal.

 

How Does Compliance Influence Security?

Security measures protect your company’s assets and stop unauthorized individuals from accessing sensitive data. However, security teams also need to comply with the compliance needs of their organization. Many standards and frameworks help improve cybersecurity, deter fraud, and protect user data. Compliance measures can help your organization become more secure. They provide a set of clear frameworks, checklists, and best practices that reduce risk across an industry. ISO 27001 is a comprehensive compliance framework that outlines all of the components of a strong information security management system (ISMS). Organizations can use ISO 27001 as a blueprint for designing their security strategy, rather than using it as a secondary process.

If you are a health care professional read about HIPAA.

 

Conclusion: –

Compliance and security are both important aspects of any business. However, the question of which is more important is a difficult one to answer. Compliance is necessary to ensure that your business is following all the regulations governing it, while security protects your company from potential outside threats. While your business must have both compliance and security measures in place, you may have to prioritize one over the other depending on your specific situation.

What is SOC 1, SOC 2, and SOC 3 Audit Reports? Why do you need one?

INTRODUCTION

SOC 1, SOC 2, and SOC 3 Audit Reports are necessary for companies that store, process, or transmit sensitive data. The reports assess the design of internal controls and the operating effectiveness of those controls at a specific point in time. They provide assurance to users about the security, confidentiality, and privacy of the company’s systems. If you’re looking for a third-party assessment of your data security system, you’ll need a SOC 1, SOC 2, or SOC 3 Audit Report.

 

What is a SOC 1, SOC 2, and SOC 3 Audit Report?

A SOC 1, SOC 2, and SOC 3 Audit Report is an examination of a company’s internal control over financial reporting. The audit is conducted by an independent third party and aims to provide assurance to stakeholders that the company’s financial statements are fairly presented by Generally Accepted Accounting Principles (GAAP).

SOC-1: – A SOC 1 report is a review of how well a service organization’s internal controls work when it comes to a user entity’s financial statement. It’s designed for the people who use these services and the accountants who audit their books. In short, it’s an evaluation of a service organization’s internal controls.

SOC-2: – A SOC 2 audit report provides detailed information and assurance about a service organization’s security, availability, processing integrity, confidentiality, and/or privacy controls. The report is based on the service organization’s compliance with the AICPA’s TSC (Trust Services Criteria).

SOC-3: – The Soc 3 report outlines how a service organization’s internal controls can ensure information security, availability, processing integrity, confidentiality, or privacy. These five areas are the focus of the AICPA Trust Services Principles and Criteria.

 

What are the differences between the three types of reports?

The Major differences between Soc 1 vs. SOC 2. vs. SOC 3

SOC 1 and SOC 2 are the two most common types of SOC reports. They differ in that SOC 1 looks at financial reports, while SOC 2 looks at compliance and operations. The focus on compliance is especially important for technology companies, as they need to make sure their systems are secure and protect their customers’ data.

V SOC 3 reports are not as common as SOC 2 reports. SOC 3 is a variation of SOC 2 with the same information, but it is presented in a way that is accessible to a general audience rather than an informed one. If a SOC 2 report is for auditors and stakeholders inside the company you’re selling to, SOC 3 is for that company’s customers.

SOC 3 reports are less common than SOC 2 reports. SOC 3 is a variation on SOC 2, and it contains the same information as SOC 2, but it’s presented for a general audience rather than an informed one. If a SOC 2 report is for auditors and stakeholders inside the company you’re selling to, SOC 3 is for that company’s customers.

 

Why do you need a SOC 1, SOC 2, or SOC 3 Audit Report?

A SOC report is an auditing report which is performed by a Certified Public Accountant (CPA) designated by the American Institute of Certified Public Accountants (AICPA). It is a collection of services offered by a CPA concerning the systematic controls in a service organization. SOC reports tell us if financial audits are performed or not; if audits are done as per the controls defined by the serviced company or not; and the effectiveness of the audits performed.

Just as an organization must take steps to protect its data and ensure that it is meeting all legal requirements, so too must it demand that its vendors submit to a SOC report. This report is a compilation of safeguards within the vendor’s control base and also a way to check if those safeguards actually work. Without it, you are taking a risk with your business.

Some of the vendors provide a SOC 1 report, while some give SOC 2. Sometimes it might also happen that some of the vendors provide a combination of both. Not just this, but SOC 3 reports to exist. The differences are vast and are not always clear to those who are not familiar with the domain of Systems and Organizational Control.

If you are an health care professional read about HIPAA.

 

How can you get a SOC 1, SOC 2, or SOC 3 Audit Report?

A SOC 1, SOC 2, or SOC 3 report is an important document that shows the level of trust and security your company has with its customers. It can also be used to show compliance with certain regulations.

SOC in 5 Simple Steps

Determining the Scope of a Project: – The first step in getting a SOC report for your company is to define the scope. The stakeholders should ask themselves some questions, including:

-What service(s) do you need a SOC report for?

-What systems are involved in providing those service(s)?

-Are the services provided from a single location or several?

-Is the report intended for all users or only one specific customer?

When it comes to service organizations, it can be difficult to define the scope because they offer a variety of services to their clients. However, it is important to narrow down the scope so different services can have their own SOC report. This isn’t always easy since some services can be combined into one common report (i.e. the various payroll processing services of a payroll company). But it is important to make sure each service has its own specialized report.

Choosing a Report: – The next step is to determine which type of report(s) will best suit your company’s needs. This decision should be based on what your customers need, as well as what their auditors require. The most common report is the SOC 1 report (SSAE 16 or the historic SAS 70), but SOC 2 and SOC 3 reports continue to gain traction. It is important to ensure that the type(s) of the report(s) a service organization pursues will satisfy its customer needs.

The service organization should select the SOC report that meets their needs based on contractual agreements and client requests. The SOC 1 report detailed the controls placed into operation for services relevant to financial reporting. The SOC 2 report detailed the controls placed into operation for services concerning security, availability, processing integrity, confidentiality, and/or privacy. The SOC 3 report was a high-level report that included a seal and was made publicly available to users with a need for confidence in the service organization’s controls.

Preparing for the Assessment: – Organizations can take steps to prepare for a SOC assessment by undergoing a readiness assessment. This assessment is meant for management and will help identify strengths and weaknesses in terms of the control environment. It is typically recommended for clients that have never undergone an assessment before. No matter how many SOC reports a service organization has released, management should always review and update their policies and procedures to ensure they reflect current practices. This will help to ensure employees are aware of the upcoming assessment.

It’s SOC time: – The auditor who is conducting your SOC 1, 2, and 3 will be working closely with you to make sure the assessment goes smoothly. After agreeing upon when fieldwork will take place, the process for assembling the SOC report can be outlined in a few basic steps:

The auditor will provide you with a list of requested evidence (usually a month in advance of fieldwork).

The audit team will arrive onsite at your service organization to perform testing (that includes interviews, walkthroughs, and documentation review).

Service auditors document the results of their work and work with service organizations to clarify any exceptions. They then provide a SOC report to the service organization.

Next Steps: – Most service organizations undergo a SOC assessment on an annual basis. This allows them to continuously improve the quality of their SOC report and control activities within it. They should consider feedback from their service auditors and customers (who use the report) to do this. Service audit firms often provide their clients with a list of observations made during SOC fieldwork.

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Conclusion: –

SOC 1, SOC 2, and SOC 3 Audit Reports are necessary for companies that store, process, or transmit sensitive data. The reports assess the design of internal controls and the operating effectiveness of those controls at a specific point in time. They provide assurance to users about the security, confidentiality, and privacy of the company’s systems. If you’re looking for a third-party assessment of your data security system, you’ll need a SOC Auditor.

SOC 2 Audit for Amazon AWS Environments

SOC 2 Audit for Amazon AWS Environments

With the migration to the cloud happening at record pace, thousands of companies are currently
being needed to become SOC 2 compliant every year. In this blog, we will be touching upon the key
areas and their importance from a SOC2 perspective related to Amazon Web Services (AWS) being
used as a cloud platform.
SOC 2 Scoping & Readiness Assessment: Understanding scope and also the what business
processes are to be enclosed inside your SOC 2 audit is important, and conjointly for mitigating any
kind of scope related problems. Since you’re hosting your services (i.e., your production
environment) in AWS, it would have its own variety of advantages along with your SOC 2 audit.
oFirst, a wide range of the physical security controls are lined by AWS themselves as their
personal information centers store your virtual server instances.
oSecond, AWS incorporates a decent number of audit & compliance, and management tools &
solutions that are straightforward to “spin up” in any surroundings, additional serving to
compliance needs
Leverage AWS’ SOC Reports for Scope Reduction: For the CPA firm you engaged with to
perform your SOC 2 audit, they’ll kindle you to get a replica of AWS’ most current SOC 2 report,
and for an obvious reason – scope reduction. A large range of the controls you’ll want for SOC 2
compliance are literally lined by AWS’ report. From physical and environmental controls –AWS’
SOC 2 must be leveraged.

Utilize AWS’s Security and Compliance Tools: CloudWatch logs reports on application logs,
whereas CloudTrail Logs details on specific info on what occurred in your AWS account. These are
simply some samples of the various tools that AWS has accessible for your growing security,
governance, and regulative compliance desires.

Visit https://aws.amazon.com/products/security/ and you’ll notice a list of tools and solutions for
serving to meet growing regulative compliance desires for not solely SOC 2, but HIPAA, HITRUST,
GDPR, PCI DSS, FISMA, and far a lot of. Here may be a sneak peek at the various tools accessible
for from AWS in serving to with growing regulative compliance needs:

o AWS object: The AWS object portal provides on-demand access to AWS’ security and
compliance documents, conjointly referred to as audit artifacts.
o AWS Certificate Manager: AWS Certificate Manager may be a service that permits you
to simply provision, manage, and deploy Secure Sockets Layer/Transport Layer Security
(SSL/TLS) certificates.
o AWS CloudHSM: The AWS CloudHSM service helps you meet
company, written agreement and regulative compliance needs for information security by
mistreatment dedicated Hardware Security Module (HSM) appliances inside the AWS cloud.
o Amazon Cognito: Amazon Cognito permits you to add user sign-up/sign-in and access
management to your net and mobile apps quickly and simply.
o AWS Identity and Access Management (IAM): Use AWS Identity and Access
Management (IAM) to regulate users’ access to AWS services. Produce and manage users and
teams, and grant or deny access.

There are more tools accessible from AWS once it involves security & compliance, therefore use
them as required. They’ll build life within the cloud and they’ll build your SOC 2 audit much easier.
Implement the Tools: Sounds simple, however we’ll got to with courtesy prompt you that simply
knowing that such tools are accessible isn’t enough, you would like to place them to smart use as
auditors can wish to envision proof of such. If you’re not aware of AWS in terms of their toolsets
and offerings for regulative compliance, then it’s necessary to search out for AWS security &
compliance.

Develop AWS info Security Policies and Procedures: One among the foremost aspects of
turning into SOC 2 criticism is developing all the specified info security policies and procedures.
Specifically, SOC 2 is significant on documentation, and you’ll have to be compelled to place in situ
strong, literary InfoSec policies. However a lot of necessary, these policies have to be compelled to
be written specifically for your surroundings inside AWS.
Here’s simply a little sample of policy documents you’ll want for turning into SOC 2 compliant:
o Access management
o Information backup
o Incident response
o Information retention and disposal
o Security and patch management – and many more.
Perform Essential Operational Initiatives: Four key operational initiatives that you simply
should perform for SOC 2 compliance are:
o Perform annual risk assessment
o Check your incident response annually
o Implement security awareness coaching
o Conduct vulnerability scans periodically

The Audit Begins: The auditors are going to be inquiring for a wide range of evidences.
Specifically, they’ll be requesting documentation (i.e., policies and procedures), proof of varied
system settings (this can are available the shape of screenshots), proof of operational measures
undertaken, like security awareness coaching, risk assessments, and more. It’s therefor essential to
produce them with any and every one requests that return your means. In short, be clear along with
your auditors.
We believe this the article would have enhances your understanding of AWS controls from a SOC2
perspective. Please reach out to us if you would like to know more about data security or need any
help to perform a SOC/ GDPR certification for your organization.

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reporting.

History of SOC reporting

History of SOC reporting

 

This blog helps you understand the history and background of SOC reporting and a brief overview of how it came into
existence and evolved as a way of addressing risks associated with outsourcing services.
Brief History
The increased prominence on governance, risk management, and compliance has steered companies to focus on internal
controls over all aspects of their operations. Service organizations providing outsourced services (IT, business processes,
etc.) often engage a third party audit firm to certify the design and operating effectiveness of these controls. The auditor’s
inspection of an organization’s internal control and the impact that a service organization may have on the entity’s
control environment has long been an area of focus in designing an acceptable audit approach.
The original standard for attesting was known as SAS 70 and was an established way by which service organizations
could illustrate the effectiveness of their internal controls. The SAS 70 audit was performed by a CPA and the result was a
report on the effectiveness of internal control over financial reporting (ICFR). This report was often used by the
organizations to show that a vendor was secure and safe to work with. However, the report was principally was not meant
for that purpose.

Introduction of SSAE 16

The technology evolved and so did the AICPA’s attestation standards. SSAE No. 16 reporting standards was completed by
the AICPA in January 2010. SSAE 16 beneficially replaced SAS 70 as the reliable guidance for reporting on service
organizations. SSAE 16 was officially issued in April 2010 and became effective on 15th June 2011. SSAE 16 was drafted
with the objective and purpose of updating the US service organization reporting standard so that it reflects and adheres
to the new international service organization reporting standard – ISAE 3402.
SSAE 16 also established a new attestation standard called AT 801 which contained guidance for performing the service
auditor’s examination. Many service organizations that had previously performed a SAS 70 examination now switched to
the new standard in 2011 and now had an enhanced SSAE 16 report (also referred to as a Service Organization Controls
(SOC) 1 report).

The upgraded SSAE 18

The SSAE no. 18 (Statement on standards of attestation engagements) used for SOC reporting is the latest periodic
statement issued by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants
(AICPA) effective from 1st May 2017. Following were the key changes in transforming from SSAE16 to SSAE18:
 SOC as defined under the SSAE-16 Standard stood for ‘Service Organization Control’. Under the new
Standard, SOC now stands for ‘System and Organizational Controls’, and applies to other types of
organizations and both system and/or entity-level controls.
 In the SSAE-16 Standard, complementary user-entity controls (CUEC) were defined as those controls at userentity organizations that were both necessary and unnecessary to achieve control objectives stated in
management’s description. Under the SSAE 18 Standard, CUEC are now defined as those controls that are only
necessary to achieve control objectives stated in management’s description.
 The new SSAE-18 Standard adds requirements related to subservice organizations (SSO) and vendor
management processes. When subservice organization is carved out, the inclusion of SSO controls are now
provided in management’s description similarly to CUECs. Also, vendor management processes to monitor the
effectiveness of controls at SSO have been stressed upon.
 The new SSAE-18 Standard requires that the Management Assertion letter accepting responsibility for the
description be signed. Previously, a Management Assertion letter was required but it did not have to be signed.
 The new SSAE-18 Standard has also included revisions to the language used in the Management Assertion Letter
and Service Auditor’s report to accommodate general changes and those associated with complementary userentity and subservice organization controls.

The following table summarizes some of the Statements relative to internal control, the effect of information technology
on a financial statement audit, and service organizations, that have been made since SAS No.70 standards introduced in
1992.
Statement Name Date Issued Title of Statement
SAS No. 70 April 1992 Service Organizations
SAS No. 78 December 1995
Consideration of Internal Control in a
Financial Statement Audit: An
Amendment to Statement on
Auditing Standards No. 55
SAS No. 88 December 1999 Service Organizations and Reporting
on Consistency
SAS No. 94 May 2001
The Effect of Information Technology
on the Auditor’s Consideration of
Internal Control in a Financial
Statement Audit
PCAOB No. 2 March 2004
An Audit of Internal Control over
Financial Reporting in Conjunction
with an Audit of Financial
Statements. (Note: Appendix B refers
to Service Organizations)
PCAOB No. 5 May 2007
An Audit of Internal Control over
Financial Reporting that is Integrated
with an Audit of Financial
Statements. (Note: Appendix B17-B17
covers Service Organization
considerations.)

ISAE No. 3402 December 2009 Assurance Reports on Controls at a
Service Organization
SSAE No. 16 April 2010 Reporting on Controls at a Service
Organization
SSAE No. 18 May 2017
Concepts common to all Attestation
engagements (with more stress on
system details, CUEC
(complimentary user organization
controls) and SSO (sub-service
organization) controls.)

Hope this blog would have added to your understanding the knowledge related to SOC reporting standards.
Stay connected and feel free to reach out for knowing more about different types SOC reporting.

Understanding a SOC 3 Report

Understanding a SOC 3 Report

 

Overview

Over the last decade, companies have started to see outsourcing as a way of reducing
costs and improving inefficiencies which lead to a rapid growth in outsourcing of
software as service and other cloud-based technologies. The change led to an
increased demand of SOC reports and has also increased the necessity for auditor
reporting at service organizations to make sure that these service providers have
appropriate internal controls in place to manage their information systems. As these
requests from customers for these reports become more frequent, it can often
become confusing on which report you ought to be providing also as which report
are going to be more useful for the Service Organization.

Introduction

AICPA has 5 main Trust Services Criteria namely security, availability, processing
integrity, confidentiality and privacy. A Service Organization Control 3 (SOC 3)
report provides information related to a service organization’s internal controls
around these TSCs.
A SOC 3 is intended for a public audience. These reports are short and include lesser
details as compared to a Soc 2 report, which is distributed to a focused audience of
stakeholders. Due to generic nature, Soc 3 reports can be shared openly and posted
on a company’s website to portray their compliance. However, the report may still
be invaluable for an organization looking for insights on their current security and
control landscape.

Difference Between a SOC 2 and SOC 3 Report

Basically, both SOC 2 and SOC 3 reports revolve around same AICPA standards and
the work performed by the service auditor for the two reports is very similar. Both
reports are based on the AICPA’s TSCs and the controls identified and tested are
usually same for both the reports. Following are some key differences between both
the reports:
• SOC 2 reports can be either Type I or a Type II while a SOC 3 report is always
a Type II report
• SOC 3 report has a less detailed description of controls related to compliance
and operations. Also, it does not include detailed testing procedures or results
of testing.
• SOC 2 reports are meant for restricted use reports of the service organization’s
management, customers, and customers’ auditors. On contrary, SOC 3 reports
are general use reports that can be distributed freely as they contain
significantly less detail.
• SOC 3 report are more used as tool for attracting prospective customers but it
may not satisfy the needs of current customers and their auditors.
• A SOC 2 report is larger in size as it includes an auditor’s opinion,
management’s assertion, a detailed description of the system. It also includes
description of service organization’s internal controls and their test results
performed by the service auditors. However, a SOC 3 report is much smaller in
size and consists of a brief auditor’s opinion, management assertion, and a
brief narrative providing background on the service organization. It contains
very less detail on the specific controls operating within the service
organization

Benefits of a SOC 3 Report

Following are some key benefits of obtaining a SOC 3 report:
• It evidences that your organization invests in security measures and portrays
customers that you’re transparent about your practices
• SOC 3 report can help enhance your company’s credibility and gain the trust of
new clients.
• Provides you an edge over competitors who do not have any third-party
certification
• A positive report demonstrates you have a professional team and your
organization cares about clients to ensure that their data is safe from cyber
threats.

Summary

To conclude, it is relatively easier for an organization to decide if they need a SOC 1
or a SOC 2 because the key difference between being that SOC 1 is more inclined
towards impact of service organization’s controls on the customer’s internal control
over financial reporting. The decision becomes a little more difficult when deciding
between a SOC 2 and SOC 3 report.
Important thing to remember is that a SOC 2 is a restricted use report that contains
detailed information on the system, the controls in place, the service auditor’s test
procedures and the results of their test procedures. SOC 2 reports are useful for
corporate oversight, vendor management programs, internal corporate governance
and risk management processes.

A SOC 3 is a general use report that does not include much detail and is a great
marketing tool. They can be used to attract new client and induce confidence and
trust in both upcoming and existing clients.
We believe this the article would have enhanced your understanding about SOC 3
reports. Please feel free to reach out if you have any queries related to SOC reports
or need to get a SOC/ISO/GDPR certification done for your organization.
You can also visit our website https://accorppartners.com/soc/index.php to read
more articles related to SOC reporting

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/Review/Compilation

SOC 2 vs. ISO 27001 Audit

SOC 2 vs. ISO 27001 Audit

 

As we talk about the two auditing standards, we should keep in mind that both are
information security standards and involve an external audit performed with an intent of
keeping your and client’s data safe. Both are standards have different fundamental
methodologies for providing an assurance. While, ISO 27001 is a certification of an ISMS
(Information Security Management System) tested against an established framework, SSAE is
an audit of the processes, policies and procedures an organization has in place.
ISO 27001 involves issuing a certificate of compliance by the auditor on completion which
confirms that the organization meets the requirements set by the International Organization
for Standardization (ISO) and International Electro technical Commission for protecting
information and managing risk. A SOC 2 attestation involves a report prepared by the auditor
to ascertain whether that a service organization’s security controls meet the relevant Trust
Services Criteria set by AICPA. While, both the standards cover most of the similar topics,
they focus on differing audit criteria and the details of the two standards are completely
different.

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SOC 2 Assessment
SOC 2 audit involves evaluating a service organization’s internal controls, policies, and
procedures precisely based on the 5 trust services criteria i.e. security, availability, processing
integrity, confidentiality, and privacy. The Trust Services Criteria are relevant to the services
of organization as follows:
 Security – Protection of system against unauthorized access
 Availability – Availability of the system for operation and use
 Processing Integrity – The system is processing information completely,
accurately and timely
 Confidentiality – Information classified as confidential is protected
 Privacy – Any personal information is collected, used, retained, disclosed, and
destroyed in accordance with the entity’s privacy notice.
ISO 27001 Audit
ISO 27001 is an internationally accepted standard for governing an organization’s
Information Security Management System (ISMS). The ISMS preserves the confidentiality,
integrity, and availability of information by applying a risk management process and induces
trust in external parties that information related risks are appropriately managed by the
organization.

The ISO 27001 standard regulates how an organization creates and run an effective ISMS
through policies and procedures and associated legal, physical, and technical controls
supporting an organization’s information risk management processes. An ISMS protects the
confidentiality, integrity, and availability of information by applying a risk management
process. Following 7 sections of the ISO 27001:2013 standard (from section 4 to 10) provide
the core guidelines for compliance with the standard:
 Section 4: Context of the Organization
 Section 5: Leadership
 Section 6: Planning
 Section 7: Support
 Section 8: Operation
 Section 9: Performance evaluation
 Section 10: Improvement.
Following are few other key differences between SOC 2 and ISO 27001 standards that
further enhance your understanding:
The certifying and governing bodies
The SOC 2 report is attested by a licensed CPA (Certified Public Accountant) firm attests whereas an
ISO 27001 certification is certified by a recognized ISO27001-accredited registrar. ISO 27001 is
managed by the International Standards Organization (ISO) and SOC 2 attestation standards
(SSAE 18) are regulated by the American Institute of Certified Public Accountants (AICPA).
Market Relevance
Both the standards are creditable security certifications accepted by clients widely. Precisely, if
you are selling services to organizations in the United States, SOC 2 is better suited. However,
if you are doing business internationally, ISO27001 is more extensively accepted by clients
worldwide.

Certification Renewals
SOC 2 has two types namely Type 1 (which gives a point in time design assessment) and Type
2 (which requires you to demonstrate effectiveness of your security controls for a period of
time, typically twelve months). Typically, a SOC 2 Type 2 needs to be renewed on an annual
basis. On the other hand, an ISO27001 engagement includes a 3 year commitment where you
have a point in time audit every year the certification and gets renewed annually after the
successful completion of the audit.
Report Type obtained on completion
SOC 2 gives you a detailed report containing the auditor’s opinion, management’s assertion,
description of controls, user control considerations, tests of controls, and the results.
However, ISO certification is a single page certification issued to the company.
Applicability and use
A SOC 2 report laid out on the Trust service criteria is applicable to an organization’s overall
system while ISO 27001 based on the Information Security Framework is precisely applicable
to organization’s ISMS.
Further, SOC 2 attestation being a good industry practice is used measure a Service
Organization against static security principles and criteria. The ISO 27001 is considered to be
one of the best practices performed to establish, implement, maintain, and improve the ISMS
of the organization.

Conclusion
Both SOC 2 and ISO 27001 are effective compliance methods for organizations to accept and
can be utilized to get an edge over market competition, demonstrate the design and operating
effectiveness of internal controls, and to achieve compliance with regulatory requirements.
One can decide to go through either a SOC 2 or ISO 27001 engagement based on their
understanding of markets, customer’s and the regulatory requirements that they need qualify.
Hope, you have a clearer picture about the two standards now. Please feel free to reach out to
us in case you have any queries or to seek more information.