SOC 2 for Startups – A Complete Guide

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This SOC 2 guide helps you understand the
significance of SOC 2 Compliance for your
Startup. It also explains the process for getting
a SOC 2 Report. SOC 2 for Startups is no more a
nice-to-have but a necessity amidst the growing
Data Security concerns. Data Breach and declining
Digital Trust are major issues for the companies
across the globe. For tech Startups and SaaS
companies, preventing Data Breach is a much more
serious and fundamental concern. Occupying the
lower rung has its disadvantages and making up
for additional costs by charging more is not an
option. Thats where SOC 2 for startups becomes
crucial.
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SOC 2 Compliance is a term used from the
perspective of software vendors, tech companies,
SaaS Startups, and their customers. If an
organization complies with the SOC 2
requirements, it is believed to observe high
standards of information security. Therefore, it
is safe to do business with the complying
organization. In this sense, its a desired
status that shows greater trust and higher
confidence of prospective enterprise-level
clients in the scenario of B2B dealings. SOC 2
compliance can also come as a customer request
before signing a business contract. However, such
a request is not feasible since SOC 2 reporting
can take months. To achieve an SOC 2 Compliant
status, Startups need to undergo an auditing
process, resulting in an attestation report. The
SOC 2 report evaluates the organizations own
claims regarding its quality of security controls.
What is SOC 2 Compliance?
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In order to attain SOC 2 for
startup, you will need a thorough understanding
of the framework before beginning the SOC 2
process. Trust Service Categories (TSCs) are
the main component of SOC 2 framework and sit at
the top of the hierarchy. You will need to
define, set up, and implement Information
Security Controls depending upon the TSCs you
choose. AICPA outlines its approach for
companies to begin the SOC 2 process through a
few points. These points help companies implement
controls based on TSCs.
Understanding the SOC 2 Framework
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Information Security Information Security is the
central concern of SOC 2. It relates to
protecting data of clients and customers from
unauthorized access and use. Secure Logical and
Physical Access Securing Logical and Physical
Access is about restricting access to data,
devices, and networks. They help in identifying
authorized personnel to manage access while also
laying out the roles, responsibilities, and
privileges. Continuous System Operations System
Operations relates to the strength and efficiency
of the infrastructure to detect and tackle
deviations and disruptions in operations. It also
focuses on the time required for mitigating the
process deviations to avoid information security
breaches. Change Management Change Management
refers to secure handling of infrastructure,
software, processes, or data after the updates.
Preventing unauthorized changes during the
updates is a central concern here. Risk
Mitigation Risk Mitigation is meant to encourage
identification, tracking, and monitoring of risks
to business and services. These risks may relate
to information security, location, or growth.
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What is SOC 2 for Startups?
Service Organization Controls 2 or SOC 2 is an
all-encompassing compliance, auditing, and
reporting framework governed by the American
Institute of Certified Public Accountants
(AICPA). The responsibility of updating and
maintaining the SOC 2 lies with the Certified
Public Accountants (CPAs).
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Process for SOC 2 for Startups Assembling the
SOC 2 Team and Starting a Culture The first step
towards compliance involves assigning personnel
the responsibility of sailing through the
process. Your SOC 2 team should include A
Technical Lead to communicate with the auditor.
This person will act as a bridge between the SOC
2 team and the auditor. CTO or a VP of
Engineering can be ideal for this role. A
Business Process Lead to manage the compliance
and auditing tasks. This person will define the
workflow, delegate responsibilities, and
establish deadlines. A COO or HR Manager is ideal
for this role. An Information Security Lead, who
will be responsible for Security Process
Documentation. You may appoint a Director of
Security for this purpose or assign this role to
a Senior Engineer.
STEP 1
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STEP 2
Setting up the Information Security
Architecture The InfoSec architecture will
comprise systems, policies, and controls, besides
the SOC 2 team. You may need to designate a
person in each team to ensure adherence to data
security rules. Heres a list of Policies that
will help you set up an InfoSec System for the
categories and controls of your SOC 2 report.
1-Data Classification and Handling 2-Risk
Management 3-Business Continuity and Disaster
Recovery 4-SDLC Policies 5-Incident
Response 6-Vendor Management
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Step 3 Implementing SOC 2 Requirements Test the
effectiveness of your data security policies,
methods, and procedures by putting them into
action. Do a gap analysis first. In the selection
of Categories and Controls you have chosen, look
for gaps. After deciding on the SOC 2's ultimate
scope, confirm that the necessary policies are in
place. Assign someone within the company to
examine the policies. updates the rules and
regulations. Don't be afraid to hire an outside
reviewer! You can upgrade the security control
design within your organisation once the gaps
have been filled. To comply with the data
security regulations, you might need to make a
few minor alterations to the way your
organisation operates. It is frequently
necessary to upgrade hardware, software, and
networks in order to implement SOC 2
requirements.
STEP 3
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STEP 4
Step 4 Evidence Collection and
Documentation Collect evidence showing that all
the security controls within the organization are
working as intended. The collected evidence has
to be documented. Some essential documentation
includes Management Assertions explains how the
startups system fulfills the service commitments
and meets the TSCs selected for the
audit. System Descriptions show the components
of the infrastructure that fall in the scope of
the SOC 2 audit. Flowcharts and diagrams make up
the Systems Descriptions. Control Matrix
provides the details of the Controls, Criteria,
and Categories.
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Readiness Assessment and Remediation Readiness
Assessment is a rehearsal of the actual auditing
performed by internal or external auditors. Its
aim is to point out the gaps in security controls
prior to the final audit. You may choose to
create a report from the mock audit, or simply
concentrate on finding the deficiencies and
remedial actions. Preparing for final SOC 2
Audit Choose an auditing firm or a certified
auditor to conduct the compliance audit for your
company. Keep all the documentation ready for the
auditor. Prepare your staff for the interviews
that will include questions regarding business
operations, security controls, and SLAs. After
receiving the Attestation Report, prepare for
continuous monitoring and attaining the next SOC
2 report. Following these six steps, you will be
able to sail through your first SOC 2 process.
STEP 5
STEP 6
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