Are you preparing for a SOC 2 audit? Are you considering getting certified, but are put off by the SOC 2 audit cost? Although it may seem overwhelming and complicated, SOC 2 certification is highly valuable for any company.
The cost of a SOC 2 audit may seem somewhat complex, so let’s break it down. In order to fully understand SOC 2 audit cost, you need to know what SOC 2 certification entails.
Exploring the Factors of a SOC 2 Audit’s Cost
What is a SOC 2 Audit?
You probably have a broad understanding of the compliance requirements for data security, but you might not be familiar with all the guidelines of SOC 2.
SOC 2 is the current criteria for the secure management of customer data by a company. The regulations are based on five factors, called “trust service principles”:
- Privacy: Is customer data properly collected, used, stored and disposed of by the company?
- Security: Are the company’s systems completely protected against breaches, to ensure that customer data is not stolen or lost?
- Availability: Are the company’s systems and data readily available at all times?
- Processing integrity: Are the company’s systems and security tools up to date and working properly and efficiently?
- Confidentiality: Is the company’s stored confidential data secure?
A SOC 2 audit refers to the process in which a certified public accountant or CPA firm examines your business to see if you meet these five critical SOC 2 requirements.
Need Help With Your SOC 2 Audit?
We have the right experience and can simplify all of your SOC 2 issues.
Why Do I Need SOC 2 Certification?
Cyber attacks rise year after year, and cyber crime is one of the most profitable industries in the world. Despite the significant risk, up to 50% of businesses in the U.S. do not have a cybersecurity plan in place.
This gap means that many businesses are under a very real threat of cyber attacks and data loss or theft.
Having your customer data stolen can be devastating for a business. In addition to losing valuable data, you will face the expense and work interruption of having to deal with the cyber attack and securing your systems.
The real problem with data breaches is the damage to your reputation. Customers no longer feel safe doing business with your company when their data is compromised.
You may also face legal action if you were not properly storing customer data. Even huge, well-established corporations like Target and JP Morgan Chase have lost millions of dollars due to data breaches and the resulting legal fees.
How Much Does a SOC 2 Audit Cost?
SOC reports costs are determined by a variety of factors. There are two types of SOC 2 audits, type 1 and type 2. Depending on the type, a company may spend between $20,000 to $100,000 for its total SOC 2 audit cost.
A type 1 audit only provides a short-term evaluation of a company’s cybersecurity for one specific point in time. A type 1 audit is less expensive and only takes a few weeks to complete.
The problem is that a less comprehensive audit does not provide as strong assurance to clients. Most companies that complete a type 1 audit eventually end up paying for a type 2 audit anyway.
A type 2 audit is a much more in-depth process. This audit looks at how a company’s system and controls function over a long period of time, usually multiple months or a year. Due to the more thorough nature of this audit, the cost of a SOC 2 type 2 audit is higher.
SOC 2 certification, however, instantly signifies to clients that the company is highly trustworthy and serious about the security of customer data.
How Much Does a SOC 2 Type 2 Audit Cost?
On average, the cost of a SOC 2 type 2 audit is $30,000 to $60,000. The larger your organization, the higher the cost for type 2 reports.
When considering total SOC 2 type 2 audit cost, however, it is important to factor in associated costs.
Although a preliminary assessment is not mandatory before applying for SOC 2 type 2, it is highly recommended.
The auditor will assess your current internal controls and alert you of any security gaps or issues so you can fix them. The readiness assessment costs about $15,000 but is a highly valuable tool when you are preparing for certification.
In order to qualify for SOC 2 type 2 certification, you may need to purchase new software or hardware. If the auditor identifies gaps in your security, you need to consider the costs associated with fixing these issues. These fixes often include hiring new employees and employee security awareness training. You will also have to perform background checks to ensure that employees who have access to sensitive data are safe and qualified.
Although total costs vary based on company size and current systems, expect to pay between $25,000 and $85,000.
Loss of Productivity
Although this expense is not guaranteed, if your company is focusing on SOC 2 preparation, other projects may temporarily take a back seat. If your team is not completing their normal operational tasks, you may lose revenue due to this work slowdown.
A SOC 2 report is generally only valid for one year from the date of publishing. An annual audit is required if you want to keep up your SOC 2 certification. If you are already fully prepared for SOC 2 compliance from the previous year, however, the next audit cost will be much lower.
What Factors Affect SOC 2 Audit Cost?
The cost of a SOC 2 audit depends on:
- Type of audit (SOC 1 or 2)
- The size of your organization
- Which of the trust service criteria are included
- How complex your systems and procedures are
- New software, hardware, employee training, etc.
- Additional associated costs, as described in the previous sections
Is the SOC 2 Audit Cost Worth It? What are the Benefits?
Although the cost of a SOC 2 audit may seem high, the value of SOC 2 certification is immense.
Attract Many More Clients
Clients seek out companies that have SOC 2, as it is a mark of the highest security and trustworthiness. It gives you a huge edge over your competitors that are not SOC 2 certified.
Maintain Strict Compliance
Companies that are SOC 2 certified take data security very seriously. They are much less likely to violate clients’ privacy or mishandle sensitive personal data.
Avoid Fines and Penalties
The process involved in SOC 2 certification ensures that your systems are highly secure, helping you avoid devastating data breaches and costly fines.
|Interested in learning more about SOC 2 compliance? Check out these blogs:|
How to Pass a SOC 2 Audit
The best way to pass a SOC 2 audit the first time, and avoid additional time and money wasted, is to be fully prepared. A trusted cybersecurity provider will help prepare your systems and procedures to ensure audit readiness.
Tenecom is a managed IT services provider with a strong focus on cybersecurity. We examine every facet of your cybersecurity to identify issues and come up with effective solutions. This preparation helps reduce your overall SOC 2 costs.
Tenecom has been a trusted MSP for over 35 years, and our average clients have been with us for 15 years. We focus on providing industry-leading cybersecurity and systems monitoring, with full data backup and disaster recovery.
Contact our team of experts today to discover how you can prepare your organization for SOC 2 certification.