The question "What is the cost of a SOC 2 certification?" doesn't have a straightforward answer. This is because the expenses associated with obtaining the certificate vary on several factors, such as your organization size, scope of the check, type of auditor, security tools, and readiness assessment. If you are embarking on the journey to obtain a SOC 2 certificate, it is essential to know how much you will spend to get one. That is why this guide offers a detailed cost breakdown, helping you budget effectively for this necessary cybersecurity credential.
What Is SOC 2?
SOC 2 is an auditing process that ensures a service provider securely manages data to protect the privacy of its clients. It was developed by the American Institute of CPAs (AICPA) to assess controls related to the security, availability, processing integrity, confidentiality, and privacy of data.
Types of SOC 2 Certification
SOC 2 has two different kinds – Type 1 and 2. The table below highlights the differences between them to understand the appropriate version for your business operations.
Selecting between Type 1 and Type 2 reports depends on your immediate requirements and future objectives. If you need to demonstrate compliance swiftly, possibly due to an upcoming transaction, a Type 1 report can be a rapid option as it's usually quicker to finalize. However, it's important to recognize that some stakeholders are becoming more discerning and may insist on a Type 2 report for sustained partnerships.
Why Companies Must Be SOC 2 Certified
Below are some of the reasons businesses are becoming certified:
Protects Brand's Reputation
No matter how great your services are or how loyal your customer base is, lax security practices can lead to breaches that will drive clients away and damage your brand. The financial and reputational impact can be severe, from remediation expenses to the challenge of regaining customer confidence. Earning a certification can serve as a protective measure against these negative outcomes.
Distinguishes You From the Competition
Any company can say they make customer safety and security a top priority. However, clients don't care much for these claims without the evidence to back them up. That's exactly what a formal certification can provide you. Achieving and maintaining compliance proves that you have top-notch safety plans in place. This difference might just be the nudge they need to choose your enterprise over a prospect that lacks a SOC 2 report.
Improves Your Business Operations
A SOC 2 assessment not only identifies areas for enhancing safeguard measures but also reveals opportunities to optimize your internal controls and workflows. This enables you to boost overall productivity. Furthermore, it prompts firms to integrate protective protocols into their corporate ethos.
Factors That Affect the Cost of Obtaining the Certificate
When it comes to the expense associated with obtaining the credential, several key factors come into play. These can vary considerably based on the scope and the complexity of the organization undergoing it.
The primary determinant of the overall cost is the scope of the assessment. The evaluation can encompass a fraction of an organization's technical infrastructure or the entirety of the company's operations. Typically, most firms opt for one that covers only specific aspects relevant to client data processing and support. Hence, what is right for your company ultimately depends on where and how you process or maintain clients' information and the specific mechanisms supporting these operations.
Businesses with complicated and interconnected infrastructure may face challenges in assessing and segmenting their systems for the audit, leading to increased hours spent and extended assessment timelines. In contrast, companies with straightforward and compartmentalized infrastructure will find the process more streamlined and cost-effective.
Type I or Type II
The type of compliance you opt for can expand or narrow the extent and complexity of the checks, thus impacting the associated costs. A Type I assessment is much easier to do than a comprehensive Type 2 check.
Number of Trust Services Criteria (TSC)
The number of TSCs assessed is another major cost driver. Typically, an evaluation covers all five criteria, but sometimes, only a select few are assessed if they are directly relevant to the specific operations of the organization.
If onsite evaluations are necessary due to data storage arrangements, data volume, or specific documentation requirements, choosing a firm located far away can significantly increase overall expenses. Therefore, geographic considerations based on your organization's location and industry specialization can also impact costs.
Internal Preparation Costs
Companies without an established risk management or security compliance program may incur substantial expenses to prepare for SOC 2. This may involve gathering information, implementing new tools or security measures, conducting staff training, and other activities aimed at enhancing readiness.
Breakdown of SOC 2 Certification Cost
Here is a detailed breakdown of the amount you should expect to spend if you want to get the credential:
Readiness Assessment: $5,000 to $15,000
At the outset of the process, your auditors will conduct a gap analysis and provide you with an initial assessment of your readiness. This SOC 2 readiness will identify any issues that require attention before the final inspection. The fee varies based on factors such as the TSCs you select for your report and how close you are to achieving compliance.
SOC 2 Consulting and Software: $10,000 to $50,000
Many firms will enlist external assistance to complete their reporting. This service can come from a professional agency like Eden Data. Most cybersecurity agencies can charge between $10,000 and $50,000 for this service. So you can set your budget within that range.
New Tools and Software: $5,000 to $40,000
The cost of new tools and software varies significantly depending on your existing IT infrastructure and cybersecurity posture. If you're a startup undergoing your first audit, you may need to invest in software or platforms for maintaining asset inventory, tracking compliance tickets, and managing reporting. You might also need to acquire tools for tasks like threat and intrusion detection, file integrity monitoring, and vulnerability management if you don't already have them.
Legal Fees: Up to $10,000
Allocate both time and funding for reviewing all contracts and agreements with customers, vendors, and employees, either with your in-house legal team or an external attorney. While not everyone follows this step, it can help you define responsibilities and establish policies related to the various TSCs.
Employee Training: Up to $5,000
Since SOC 2 places a strong emphasis on employee training, you'll need security education programs and the ability to track employee participation. Auditors generally accept commercially available training solutions, with costs scaling according to your company's size.
Internal Resources: $40,000 to $60,000
It's easy to overlook the time and resources dedicated by your employees or teams to ensure they meet all the requirements, but it's a critical aspect to consider. Since the process is complicated and cannot be handled as a side project by junior staff members, you will need a dedicated employee with sufficient technical knowledge and seniority to navigate the process.
Audit Expenses: $5,000 to $50,000
Lastly, you'll need to engage a certified public accounting (CPA) firm or agency accredited by AICPA to execute the audit. When selecting an examiner, align your budget with the objectives of your SOC 2 certification. If your goal is to use the report to secure deals with multinational banks, it may be worthwhile to invest in a well-known CPA firm.
How to Reduce the Fee Related to Achieving SOC 2 Certification
Reducing the cost is necessary for firms looking to maintain compliance without breaking the bank. Here are some strategies to consider:
- Limit the Scope: Focusing on a single product or a small set of trust principles can significantly lessen expenses because you reduce the amount of work required from the inspector, which in turn lowers their fees. This approach also allows your internal team to concentrate their efforts on specific areas, making the process more efficient.
- Do In-House Preparation: The more prepared you are, the less time the checker will need to spend, which translates to lower costs. You should conduct examinations to identify gaps in your controls and rectify them.
- Find a Cost-Effective Service: Not all auditors charge the same rates. Shop around and get multiple quotes to find someone whose fees align with your budget. While some offer tiered pricing or package deals that can be more cost-effective, you should make sure to consider reputation and expertise in your industry before settling for one.
- Invest in Automation: Automation can significantly reduce the hours needed for compliance tasks, thereby lowering expenses. You can use automated tools to handle repetitive tasks like monitoring and reporting and free up your staff to concentrate on more complex issues. This not only makes the process faster but also ensures that you maintain compliance more efficiently in the long run.
How to Choose the Right SOC 2 Auditor
This process involves careful evaluation and due diligence to ensure you choose a competent and experienced partner. Here are five critical steps to guide you through the selection process:
- Check Qualifications: Make sure the assessor has the essential credentials, such as Certified Information Systems Auditor (CISA) or Certified Public Accountant (CPA). Aside from that, you should confirm that they are familiar with the industry-specific regulations and standards that apply to your field.
- Evaluate Expertise: Previous experience matters. Look for proven track records in conducting SOC 2 examinations, especially in your sector. Inquire about references to gauge performance and familiarity with your business.
- Assess Communication Skills: Choose someone who can clearly convey complex issues, making it easier for your team to understand and implement recommended changes. Regular updates and a willingness to clarify doubts are positive signs.
- Compare Cost and Scope: Get detailed proposals from multiple appraisers that outline the scope of the checks, timelines, and cost estimates. While price should not be the deciding factor, it is also an important consideration. Make sure the proposal aligns with your budget without compromising the thoroughness of the evaluation.
- Conduct Interview: Before making a final decision, meet with the potential auditors to gauge your comfort level with them. You can use this opportunity to clarify any questions or concerns you might have. The right expert should make you feel confident in their abilities and comfortable with their approach to compliance evaluation.
How Long Does It Take To Be Certified?
The certification process varies in duration and can be divided into several phases, each with its own timeline.
Keep in mind that these timelines are approximate and can vary based on your organization's specific circumstances. Being well-prepared can significantly expedite the process, while a lack of preparation can extend it. It's crucial to allocate sufficient resources and time to each phase for a smooth and successful certification.
Achieve SOC 2 Certificate With Eden Data
When it comes to SOC 2 certification, Eden Data stands out as a trusted and experienced ally who can help you navigate the complex process. Our extensive knowledge of the requirements and our experience assisting others make us the ideal choice for organizations striving to demonstrate their commitment to data security, privacy, and operational excellence.
Our team can help you prepare for a SOC 2 certification, build the necessary controls, advise on the right report type, and work with your auditor throughout the process. So whether you're aiming for a Type 1 or Type 2, we ensure that your security controls are not just compliant but also effective in safeguarding your sensitive data.
Our services don't end after the audit. We provide ongoing support to ensure you remain compliant as regulations evolve and new risks emerge. From continuous monitoring to annual reassessments, Eden Data is your long-term cybersecurity sidekick.
Why Choose Eden Data?
Selecting Eden Data is a decision anchored in foresight and excellence. Here are some more compelling reasons:
- Expert Team: Gain access to a squad of specialists, including Big 4 professionals and former military experts, who will help you define your cybersecurity strategy and roadmap.
- Predictable Costs: With Eden Data, you'll never encounter hidden fees or unexpected expenses. Our transparent pricing model ensures you know exactly what you're paying for, making budgeting a breeze.
- No Onboarding Fees: We value your business and show it by eliminating onboarding costs. Start your journey toward better cybersecurity without any initial financial burden.
- 100% Satisfaction Guarantee: Our confidence in delivering exceptional service is so high that we offer a satisfaction guarantee. We're committed to exceeding your expectations in every way.
So, are you ready to level up your security game? Start your journey through these easy steps:
- Explore our services here.
- Review our pricing plans here.
- Reach out to us to kickstart your cybersecurity voyage here.
In summary, while SOC 2 certification can be costly, the expense is justified by the enhanced credibility, improved data handling processes, and the competitive edge it grants companies that handle customer data. The actual cost varies based on multiple factors, but with strategic planning and expert assistance, organizations can attain this valuable certification efficiently, reinforcing their commitment to security and affirming their reliability in the marketplace.