You’re curious about the cost to your business of a SOC 2 audit? When designing for compliance, many companies find this challenge. Depending on certain criteria, SOC 2 audits may cost from $10,000 to $150,000.
The expenses will be broken out in this post to assist you to create SOC 2 compliance’s budget. Get ready for some SOC 2 cost knowledge!
Knowing SOC 2: Definition and Reason for Importance
Designed by the American Institute of CPAs, SOC 2 is a crucial security tool. It provides guidelines for handling consumer information grounded on five trust-based service standards. These ideas center on keeping private data free from illegal access.
Many companies see SOC 2 compliance as a minimum security need.
SOC 2 provides Type I and Type II reports among other options. These reports enable businesses to demonstrate their dedication to data protection. SOC 2 compliance is very vital for companies sensitive to security.
It demonstrates to clients and associates that data security is given great importance by a business. This might inspire confidence and provide fresh commercial prospects.
Factors Influencing SOC 2 Audit Costs
Several important variables affect the cost of the SOC 2 audit. These elements include the size of your business, audit style, and extent of the examination.
Organization’s size and complexity
SOC 2 audit expenses are largely influenced by the size and complexity of a company. A Type 1 audit will cost small to medium businesses $7,500 to $15,000. Greater expenditures, ranging from $20,000 to $60,000, greet larger companies.
For Type 2 audits, expenses rise yet further. Small to medium companies usually pay $12,000 to $20,000; big companies could fork out $30,000 to $100,000.
Companies with specialized applications and sophisticated systems frequently pay more audit costs. The scope depends on the quantity of security policies, databases, and IT systems in use. More systems provide for auditors to examine more time.
For risk assessments, penetration testing, and evidence collecting in particular, this might result in higher expenses. Companies that want to effectively control their processes might have to make investments in compliance automation tools.
Type of audit—type 1 or type 2
There are two forms of SOC 2 audits: Type 1 and Type 2. Type 1 audits concentrate on the design and application of controls at a given point. They run between $5,000 and $20,000. Type 2 audits examine over time how well controls operate.
These cost more—between $7,000 and $150,000. For a Type 2 report, big companies can spend more than $100,000.
For SOC 2 audits, big 4 accounting firms charge at least $150,000. Type of audit determines depth of review as well as cost. When deciding between Type 1 and Type 2 audits, businesses have to balance their requirements against their means.
We then will discuss how to properly control expenses and be ready for a SOC 2 audit.
Auditing scope
The cost of a SOC 2 audit is significantly influenced by its breadth. Auditors assess several facets of an organization’s security systems, including privacy policies, system availability, and data protection.
increased time and resources are needed to assess more systems and processes, hence a larger scope usually translates into increased expenditures.
The extent of a SOC 2 audit determines its real cost; the more thorough the review, the more expensive it is.
Businesses managing significant volumes of confidential data usually have more audit expenses. For a SOC 2 Type II audit, companies in the financial or healthcare industries can pay anywhere between $20,000 and $150,000.
The complexity of the audit rises with the number of trust services concepts addressed, therefore driving fees toward the upper end of this spectrum.
Essential tools for security and staff training
Companies have to commit in strong security measures from audit scope to required tools and training. This covers basic applications like multi-factor authentication tools, intrusion detection systems, and antivirus apps.
These security measures shield private information and fortify a company’s resistance to online attacks.
Part of SOC 2 compliance that is really vital is staff training. Depending on the training approach used, a session costs between $25 per user or $15,000. First line of protection against security breaches is often well-trained employees.
They pick up good password techniques, vulnerability spotting, and confidentiality preservation. This information contributes to build a security consciousness culture all around the company.
Calling a consultant
Hiring a SOC 2 expert would help your audit expenses be much reduced. Usually, these professionals charge around $15,000 for their work. They are very vital in many different facets of the SOC 2 process.
Consultants help with first evaluations, gap analyses, and control execution. Their experience may expedite the audit process and assist to prevent expensive errors.
Furthermore helpful for risk assessment are consultants’ insightful analysis. Usually running between $10,000 and $20,000, this service They may walk you over compliance checks and assist in system point of failure identification.
For cloud service providers and e-commerce companies handling private consumer data, this knowledge might be very valuable. The following part will look at cost control and being ready for a SOC 2 audit.
Cost Management and Getting Ready for a SOC 2 Audit
Being ready for a SOC 2 audit doesn’t have to break the budget. Effective methods and smart planning can help you control expenses and guarantee compliance criteria are met.
Develop a project schedule.
Success of a SOC 2 audit depends on the project plan being established. First assemble a group of important management, security, and IT stakeholders. Make a schedule that lets you be ready for the official audit six months ahead.
This chronology must to include benchmarks for gap analyses, readiness evaluations, and application of required controls. Clearly define for every team member their tasks and obligations to guarantee responsibility all through the process.
An orderly project schedule facilitates audit process simplification and cost control. Add chores including internal control documentation, policy updates, and staff compliance training.
Set aside frequent check-ins to monitor development and handle any problems that surface. Your project timeline should also include any barriers and incorporate backup plans to maintain the audit on target.
Ensuring all of the compliance paperwork is in order comes next.
Make sure compliance records are in order.
Getting your compliance documents in order comes right after developing a project schedule. Important records including system descriptions, management claims, risk assessments, and security control evaluations are gathered and arranged under this procedure.
Throughout the audit, a certified public accountant will require these documents. Correct documentation lessens the audit’s risk of exceptions and helps to simplify it.
Think about using automation solutions to help with this chore. These could save preparation time and aid to lower mistakes. Many businesses discover that automating their documentation systems produces consistently reliable documents.
This strategy also releases staff time for other crucial SOC 2 compliance chores.
Think about automating compliance procedures.
SOC 2 compliance automation saves money and time. By simplifying the process, software technologies reduce hundreds of hours of labor required. These instruments track chores, compile audit data, and monitor security controls.
They also simplify yearly maintenance of compliance.
Businesses have the option of either purchasing a ready-made solution or developing their own system. The “build vs. buy” choice relies on particular demands, IT resources, and financial situation.
Many times, automation software interacts with current corporate systems and security technologies. This connection helps to produce a flawless compliance process.
Extra Expenses to Think Through for SOC 2 Compliance
Companies have to account for other costs apart from the audit itself. These may affect SOC 2 compliance’s general cost. Would want additional information about these unseen expenses? Stay on reading!
Training for staff
Compliance with SOC 2 depends much on staff training. Businesses have to make yearly investments in annual internet security awareness training if they want a security-first culture. From $25 per user to $15,000 each session, these necessary component prices vary.
The cost of maintaining SOC 2 compliance is generally higher as the introduction of new security solutions usually calls for more training.
Good staff training guarantees workers grasp of their obligations in safeguarding private data. It addresses subjects like data management, password security, and identifying possible cyberattacks.
Investing in thorough training initiatives helps companies show their dedication to maintaining a strong security posture and help to lower the risk of security breaches.
Legal charges
One of the main expenses of SOC 2 compliance are legal fees. Businesses have to spend for policy and data protection agreement reviews. Often among these costs are remedial actions and gap studies.
Legal professionals assist in making sure all records satisfy SOC 2 criteria.
Fixing and adjusting throughout the compliance process might drive legal expenses higher. Contracts, privacy policies, or security protocols might all have to be updated by businesses. Over time, this continuous legal assistance helps to preserve SOC 2 compliance.
Good contact with legal teams and smart planning will assist to properly control these costs.
Productive losses
Although legal expenses are an obvious cost, SOC 2 compliance has a hidden price in productivity lost. Staff participation in audit planning might cause slow down of daily company activities.
Workers may have to stop their regular work to compile records, show auditors procedures, or show attendance to meetings. This change of emphasis could cause delays in project deadlines and lower team production.
Company size and audit scope determine how much of an influence on productivity there is. Smaller companies may suffer more as important people balance compliance obligations with primary tasks.
Although larger companies could have specialized compliance teams, operations, security, and IT departments still suffer interruptions. Many businesses use compliance automation software to help to reduce these losses.
By simplifying data collecting and reporting, this technology helps staff members to save up time. Nonetheless, productivity issues should also take into account the initial setup and learning curve of such instruments.
Eventually
Though they vary greatly, SOC 2 charges are very vital for data security. Automation and smart planning will help control spending. Businesses have to balance possible risks and advantages against the expenditure.
In the end, SOC 2 compliance helps customers and partners to develop confidence. This is a calculated action that will help your company down road.