Looking back, 2024 was the year of technological advancements and innovation, especially in the field of AI. But it also raised concerns about the state of cloud security, which brought up discussions about SOC 2 compliance requirements. According to PwC's 2024 Global Digital Trust Insights, data breaches costing companies more than USD 1 million increased from 27% to 36%, with cloud-related threats being the top cyber-related threat.
Similarly, IBM's 2024 Cost of a Data Breach Report revealed that 40% of breaches involve data spread across multiple environments, meaning that most security plans often fail in the cloud. IBM's findings are further supported by Check Point's 2024 Cloud Security Report, which found that 61% of companies faced a cloud security incident in 2024, of which 21% resulted in a data breach.
Unfortunately, the same report discovered that only 4% of organizations are able to mitigate these risks swiftly. So, it's understandable that clients have become increasingly adamant about demanding verified SOC 2 compliance requirements.
SOC 2 reports are a public declaration of your values and commitment to security and operational excellence. Below, we discuss SOC 2 compliance requirements and break down the Trust Services Criteria (TSC).
What Are SOC 2 Compliance Requirements?
SOC 2 compliance is an auditing framework that verifies a company's information security policies and procedures align with the TSC. These security criteria were established by the American Institute of Certified Public Accountants (AICPA) to evaluate the security, availability, processing integrity, confidentiality and privacy of sensitive customer data.
Security is referred to as the "common criteria" of these five categories since it's the only mandatory component. Every SOC 2 report must include this domain. It establishes the foundation for all other trust principles.
Security encompasses user authentication, role-based access controls, intrusion detection, system monitoring and encryption at rest and in transit. These are the non-negotiable protections that are the baseline for any responsible technology provider.
The other four criteria are optional. However, clients with advanced risk postures or regulatory concerns have increasingly come to expect them as well.
Organizations can tailor their SOC 2 scope to align with the promise they make to clients and the industries they serve. For example, a healthcare SaaS provider processing sensitive patient records may include confidentiality and privacy in their report, while a fintech company that handles transaction data may prioritize processing integrity and availability.
It's important to remember that the AICPA hasn't set a specific SOC 2 compliance requirements checklist. Instead, companies can structure their audits according to the TSC. The criteria also provide "points of focus," which are specific areas to evaluate during the audit. These points of focus can help companies determine which controls they need to implement and test for compliance.
The SOC 2 Framework: Trust Services Criteria Breakdown
As mentioned earlier, the SOC 2 framework comprises five Trust Services Criteria. Let's look at them individually.
Security
As the Common Criteria, security is a universal requirement for all SOC 2 reports. It's the baseline against which an organization is measured, regardless of its operational complexity or industry.
Organizations can meet this criterion by implementing appropriate controls that protect against unauthorized access, both internally and externally. It includes multi-factor authentication (MFA), intrusion detection systems, vulnerability scanning protocols and encryption methods. Strong password policies and regular employee training further help maintain security.
Audit Focus
During audits, the security component is evaluated on more than just having the tools. Auditors also gauge their efficiency. For example, they will look at how the company tracks and escalates failed login attempts.
They may assess whether unusual patterns trigger alerts and how swiftly organizations respond to anomalies. The focus isn't just on technical requirements, but also vigilance.
Availability
Availability reflects an organization's capacity to maintain uptime and deliver reliable service. While it's not mandatory, it's a common inclusion for SaaS providers, data processors and infrastructure companies where downtime equates to lost revenue.
Controls here typically include redundant backups, service-level agreements (SLAs) for uptime and disaster recovery strategies. Many organizations use solutions like AWS Multi-AZ deployments for failover readiness in situations like regional outages.
Audit Focus
From an audit perspective, availability is about measuring how well your infrastructure holds up under pressure. Do your recovery time objectives (RTOs) align with business needs? Can your systems self-heal or reroute in the face of disruption? These are the types of questions you should be asking and addressing in your availability plan.
Confidentiality
The confidentiality criterion zeros in on how sensitive information is restricted to only those who have a legitimate need to access it. It's a priority for industries dealing with intellectual property, health records and regulated financial data.
Robust controls include data encryption, non-disclosure agreements (NDAs), role-based access policies and access control lists (ACLs). However, you need to go beyond checking boxes and demonstrating execution.
Audit Focus
Auditors will examine whether organizations regularly review access rights and if sensitive fields, such as names or IDs, are masked or redacted according to the GDPR or other privacy regulations. When these identity-protecting controls are not in place, a data breach can give malicious parties access to people's personal information.
In 2024, a data breach at the BBC resulted in unauthorized access to the personal information of more than 25,000 employees. The cloud-based attack exposed information like home addresses, names and national insurance numbers. When your clients demand confidentiality to be a part of the SOC 2 compliance report, they want to make sure they won't suffer a similar fate.
Processing Integrity
Where security keeps bad actors out, processing integrity keeps your systems performing accurately. This criterion is critical for platforms that handle financial transactions or any workflow where data accuracy impacts real-world outcomes.
Key controls include quality assurance testing, change management procedures, transaction logging, error logging and input validation. These controls make sure that data is processed exactly as intended, minus any manipulation or losses.
Audit Focus
An audit focus typically revolves around how the organization detects and addresses data anomalies. For example, do they catch errors before they cascade downstream? Auditors also check if the system is tested for logic breaks or edge cases.
For e-commerce and fintech platforms, a failure to process integrity means reputation loss, financial penalties and regulatory violations. Clients in these industries typically demand processing integrity be a part of your SOC 2 requirements checklist.
Privacy
The privacy criteria is perhaps the most people-centered component of the SOC 2 framework. It governs how organizations collect, use, retain, disclose and dispose of personally identifiable information (PII).
Privacy controls in this domain include policies governing user rights (such as the right to access and delete personal data), data retention schedules, secure disposal of PII and consent management platforms.
Audit Focus
Auditors evaluate whether your practices align with declared privacy notices and regional regulations. They may assess the traceability of consent records, the disposal of expired data and the level of control users have over their information.
Again, privacy is an optional criterion in SOC 2 requirements. However, including it in your reports is a signal that you respect data as a human right and not just as a business asset.
SOC 2 Reports and Compliance: Report Types
SOC 2 reports are formal, auditor-issued documents that provide the outside world with a verified view into how your systems protect the data entrusted to them. There are two types of SOC 2 reports, and each serves a different purpose.
SOC 2 Type I
A SOC 2 Type I report answers the question: Are your controls designed correctly at this moment? It's a snapshot of whether your policies and systems are appropriately configured to meet the security TSC as of a specific date.
The report is ideal for early-stage companies or those new to the SOC 2 process. It can be the starting point in conversations with potential clients, especially in industries where compliance is table stakes.
However, it's important to recognize its limitations. A Type I report tells stakeholders that your controls exist, but it doesn't demonstrate how well those controls actually perform over time.
SOC 2 Type II
The SOC 2 Type II report not only evaluates the design of your control but also verifies its operating effectiveness over a sustained period, usually 6 to 12 months.
To pass a Type II audit, you need to show evidence. That includes logs of access controls, results of regular vulnerability scans, document incident responses and SLA compliance. Type 2 reports are what larger clients, especially in regulated industries, are likely to request.
Key Components of a SOC 2 Report
Each section of the SOC 2 report works together to provide clients and stakeholders with a transparent and verified view of your internal controls. Here are the key components of a SOC 2 report.
Auditor's Opinion Letter
The auditor's opinion letter is the executive summary or the independent CPA firm's formal opinion on the effectiveness of your controls. It sets the tone for the report by clearly stating whether your organization has met the TSC and to what degree.
A "clean" opinion affirms that controls are operating as designed. Any qualifications or exceptions can highlight areas of risk that clients will examine closely.
Management Assertion
The management assertion is a signed statement confirming that you have implemented controls and are functioning as described. It reflects accountability and signals a culture of responsibility from the top down.
System Description
The system description is the technical part of the report that outlines your environment, including the infrastructure, data flows, software systems and relevant personnel. It also describes your security policies, risk management protocols and access governance models. Simply put, this section specifies what you protect and who has access to what.
Test Results
In this section, you show how the CPA tested each control, what methodology was used and what the outcomes were. For example, it might include findings from penetration tests, user access reviews or system change logs. Consistent and repeatable test results indicate operational resilience and procedural intention. This section also includes any noted exceptions found, any explanation from the organization and how the organization will remediate those exceptions.
SOC 2 Compliance Workflow
SOC 2 compliance includes an ongoing workflow, which forward-thinking organizations operationalize as follows.
Scope Definition
First, identify which Trust Services Criteria are most relevant based on your industry and client needs. Security is a must, but which other criteria will you add to your report? Also, define which systems, applications and data environments will be covered by the audit.
Control Implementation
Next, put the controls in place as specified for each criterion above. These may include incident response protocols, role-based permissions, endpoint encryption, automation access reviews, etc. Your controls should map directly to the selected criteria.
Evidence Collection
Auditors won't just take your word for it. You must maintain audit logs, security policies, vendor risk assessments and incident reports. Ideally, your evidence collection should be continuous and automated.
External Audit
A licensed CPA firm performs the audit, which includes sampling, interviewing and testing to verify control (Type I) or performance over time (Type II).
Remediation
If the audit identifies gaps, remediation is your opportunity to demonstrate that you have fixed the problem. For example, you may patch known vulnerabilities or strengthen encryption protocols. This phase is an investment in the sustainability of your organization's overall security posture.
How to Achieve Ongoing SOC 2 Compliance
SOC 2 compliance doesn't end with the issuance of a report. To maintain compliance, organizations must:
- Refresh and update policies annually to reflect changes in operations, technology or regulation
- Conduct regular risk assessments to prepare for evolving threats and exposure
- Retest control to ensure continued effectiveness
- Maintain immutable audit trails and access records as a foundation for evidence-based governance
Organizations that treat SOC 2 as a living security framework integrated into their governance and operations are the ones that will build sustainable trust in a business landscape where the stakes for security and transparency increase every day.
Best Practices for SOC 2 Compliance Requirements
The following best practices can help leading teams meet SOC 2 requirements and turn them into strategic advantages.
Automate Monitoring and Evidence Collection
Manual compliance workflows don't scale. Modern SaaS companies and IT teams can use platforms like Onspring to automate continuous monitoring and flag anomalies in real-time. With automation, your team moves from reactive to proactive.
Engage Third-Party Auditors You Can Trust
Partner with AICPA-certified firms to provide independent assessments. Independent auditors validate your compliance posture, provide outside-in scrutiny and bring insights from other high-performing organizations in your industry.
A strong auditing partner can also help you interpret the Trust Services Criteria in the context of your evolving architecture, whether onboarding new vendors or launching in new markets.
Invest in Meaningful Security Awareness Training
Employee education is an important aspect of SOC 2 compliance. You can start with phishing simulations and add role-based security training relevant to engineering, support, HR and executive teams. Also, host interactive workshops where teams walk through real security incidents and explore how protocols should kick in.
Make sure training is continuous and not just annual. When employees are well-trained, security can become a part of your culture and not just a compliance task.
Conclusion
When approached strategically, SOC 2 compliance requirements catalyze your operational excellence while keeping clients satisfied. To manage increasingly complex compliance demands, you need a solution that adapts quickly and automates your compliance processes. Onspring’s no-code GRC platform empowers your team to automate assessments, centralize reporting and maintain full visibility across your compliance landscape. Request a demo to simplify your SOC 2 compliance with Onspring.
