A breach, crash, or targeted attack can be devastating to an organization, so it’s no surprise that IT-based service providers have a vested interest in having qualified third-party auditors certify the security and availability of their organizational systems. Both service providers and their clients have a lot riding on the security of their data as well as the dependability of their organizational controls.
By choosing to work with a SOC (Service Organization Controls) 2® compliant vendor, you can be sure that your vendor’s organizational controls, particularly regarding security, are in place and functioning up to industry standards. This is of focused importance in several industries, including healthcare IT, where patient data is subject to stringent HIPAA compliance regulations for privacy and security.
Scope of SOC 2
To obtain SOC 2 compliance, an independent auditor performs an examination of a service provider’s internal controls for a specified period. The auditor examines the suitability of the design and operating effectiveness of the internal controls to meet the criteria set forth in the Trust Service Principles (TSPs) as defined by the American Institute of CPAs: Security, Availability, Processing Integrity, Confidentiality, and Privacy. Depending on the nature of the business, the organization will designate any number of those five SOC 2 (TSPs) on which to be audited. For the revenue cycle industry, for example, security and availability are particularly relevant areas to examine.
The Criteria Categories provide the framework of the examination of each TSP; they include organization and management, communications, risk management and design and implementation of controls, monitoring of controls, system operations, change management and availability.
During each annual SOC 2 audit, which can consume thousands of hours depending on the size of an organization and the scope of the audit, the independent auditor will go on site and perform a comprehensive examination of the vendor’s organizational controls. After careful scrutiny and analysis, a detailed report of the audit is provided to the vendor, and is also available to its clients.
What’s the value of partnering with a SOC 2 compliant vendor?
Today, thanks to a heightened degree of competition, complexity of environment, and increasingly diverse economy, outsourcing some business functions to an external service provider has become vital to the success of many organizations. By placing your trust in an external service provider to perform an essential function of your business, you inevitably expose yourself to risk factors beyond your control. You can gain control and confidence, however, by requesting that your vendors are SOC 2 audited and can present the report to prove it. After a qualified party meticulously audits and tests your service provider, you can be assured they have all of the important security controls in place and your data is safe.
As an added benefit, it is often the case that a vendor’s SOC 2 compliant status implies that they also insist that their own vendors and partners are SOC 2 audited. This consistently high standard of integrity leads to a more cohesive and transparent security strategy in a given network of partners.
Passing a SOC 2 audit results in more than just a stamp of approval. Your vendor’s SOC 2 audit will give you a framework with which you can carefully study the organization’s security controls. This helps organizations’ management teams make strategic decisions about the security and organizational standards of their future service partners.