SOC 2 is a reporting framework developed by the American Institute of Certified Public Accountants (AICPA) that provides a standard for service organizations to ensure they protect customer data effectively.
The framework is built around five Trust Services Criteria (TSC): Security, Availability, Processing Integrity, Confidentiality, and Privacy. Organizations can align their controls against these criteria to demonstrate their commitment to data protection. Of these five categories, Security is the only required area and serves as the foundation. It comprises nine components, known as Common Criteria (CC), which incorporate the COSO internal control framework.
The Three Stages of SOC 2 Compliance
Organizations typically progress through three stages when integrating SOC 2 into their operations or demonstrating the effectiveness of their controls:
Stage 1: Readiness Assessment This introductory stage helps organizations understand where they stand in relation to SOC 2 requirements. The results are intended for internal management use only and serve as a roadmap for compliance efforts.
Stage 2: Type 1 Coverage Type 1 represents a point-in-time assessment that confirms controls have been properly designed and implemented to align with the Common Criteria. However, this stage does not test whether controls are operating effectively over time. The resulting report can be shared with external stakeholders and typically serves as an interim step toward achieving Type 2 attestation.
Stage 3: Type 2 Coverage Type 2 provides the strongest level of assurance by examining controls over a period of time, generally twelve months. This stage validates the operating effectiveness of identified controls through comprehensive testing. The report can be shared with external users, and organizations typically maintain ongoing coverage through periodic reviews to ensure continuous compliance.
SOC 2 Readiness Assessment: Your First Step
The Readiness Assessment is the crucial first step a service organization takes when working toward SOC 2 compliance. At this stage, the goal is not to pass a formal audit but to understand your organization’s current position in relation to SOC 2’s Trust Services Criteria. Think of it as a preparation phase where internal practices are measured against what will eventually be reviewed by an independent auditor.
What Happens During a Readiness Assessment?
During this stage, organizations review their policies, processes, and technical controls to determine whether they align with SOC 2 expectations. This assessment covers critical areas such as:
How systems are secured against threats
How sensitive data is managed and protected
How employees are trained, both during onboarding and throughout their tenure
Whether documentation meets audit standards
The assessment typically reveals gaps or weaknesses that could create problems during a formal audit. For example, an organization might discover it lacks a written incident response plan, or that certain security monitoring processes are not formally documented or kept current. These findings are invaluable for prioritizing improvements.
The Readiness Report
The outcome of this effort is usually a set of internal findings or a Readiness Report. It’s important to note that this document is not an official SOC 2 deliverable and should not be shared with customers or external stakeholders. Instead, it serves as an internal management tool that identifies where improvements are needed and helps prioritize remediation efforts. The report provides a clear roadmap of next steps, giving the organization actionable guidance on what must be accomplished to meet compliance standards.
Why Readiness Matters
The Readiness stage helps organizations enter a formal SOC 2 audit with confidence. By identifying and addressing issues ahead of time, organizations significantly reduce the risk of failing to meet requirements during the official examination. This proactive approach offers several benefits:
Risk mitigation: Problems are discovered and resolved before they can derail a formal audit
Cost efficiency: Fixing issues early is typically less expensive than addressing audit findings
Internal awareness: The process builds stronger understanding of security and compliance responsibilities across the organization
Smoother audits: When the formal audit arrives, the organization is better prepared, increasing the likelihood of a favorable outcome
Ultimately, investing time in a thorough Readiness Assessment sets the foundation for successful SOC 2 compliance and demonstrates to stakeholders that your organization takes data protection seriously.
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