Something that is on the mind of every organization when getting a SOC 2 audit is the cost incurred in the entire process. However, it would be useful to think of a SOC 2 certification as an investment for the future of the company. And the fact of the matter is that any worthwhile investment will take a considerable amount of time, effort, and money. Being a SOC 2 compliant organization means that you have in place capabilities and controls related to trust services criteria, which include –
- Processing integrity
The SOC 2 standards were set by the AICPA or the American Institute of Certified Public Accountants. The SOC 2 reports indicate how well a company is managing compliance and security. This audit is a massive undertaking, which involves senior representatives from all the teams, including Sales, HR, Customer Support, Legal, and others. In the following sections, we will provide you with a breakdown of how much a SOC 2 audit costs.
Cost of SOC 2 audit
Most companies incur around $20,000-100,000 in the SOC 2 audit process. Here is a SOC cost breakdown –
- Readiness Assessment – $15,000 approx.
- Compliance Preparation – $25,000-85,000
- Formal Audit – $5,000-60,000
- Annual Maintenance – $10,000-60,000
SOC 2 audit cost: Influencing factors
The cost of a SOC 2 audit is usually dependent on the following factors –
- Type of audit: SOC 2 Type 1 or SOC 2 Type 2
- Size of the organization.
- Trust Services Criteria included the audit scope.
- Whether the control policies and systems are complex
- Readiness assessment and audit preparation costs.
- Additional costs incurred on employee training and providing security tools.
Type 1 and Type SOC 2 audit costs
- SOC 2 Type 1 audit cost: The Type 1 report shows the company’s security compliance measures at a particular moment in time. Type 1 audits usually cost $5000 to $20,000, which is significantly lesser than Type 2 audits (which are more intensive). However, there are additional costs on top of this, like employee training, readiness assessment, and more.
- SOC 2 Type 2 audit cost: The biggest difference between Type 1 and Type 2 SOC audits is the timeframe of the evaluation. In SOC 2 Type 2 audits, the assessment of a company’s security controls is done over a period of 3 to 12 months, which means that the auditor has more to review. Type 2 audits can cost around $30,000 to $60,000, which excludes the additional costs.
Even though the SOC 2 Type 2 certification cost is more, most companies have found it to be more cost-effective as opposed to Type 1 audits.
Additional costs in a SOC 2 audit
As stated before, there is a lot more besides the actual audit process that you might have to spend on. Let’s take a look at some additional costs that should be taken into account when calculating the total cost of a SOC 2 audit –
- Cost of preparation – $15,000 to $85,000
The preparation costs can vary depending on the chosen Trust Service Criteria and things you already have in place for meeting the chosen criteria. Some preparation is always required to bring your security controls up to par. Although a readiness assessment is not mandatory, you can avoid the risk of having too many gaps in your actual audit if you conduct a preliminary assessment. This can cost you around $15,000. Besides this, there will also be the cost of the gap analysis.
- Employee training and new software and tools
After your gap analysis is completed, your next task is to implement corrective measures. You might have to spend on the training of employees, hiring new employees, and purchase of new tools and software for security. You can also take professional help to close the gaps, which can lead to an additional cost of $25,000-85,000.
- Legal fees
You would also have to spend some money on the legal fees for reviewing agreements with vendors, customers, employees, and contractors. If any data protection policy is mentioned in the aforementioned agreements, it can also have an impact on the readiness for the audit.
- Other costs
There are a few more small things that add to the cost of a SOC 2 audit. This includes the “productivity” costs, as your team would have to shift their focus from other projects to achieve the compliance objectives. You would also have to allocate some money for conducting occasional security awareness training.
- Annual maintenance
When you obtain a SOC 2 certification, it remains valid for 12 months after the date of issue. To maintain SOC2 compliance, you would need to invest in a SOC 2 audit every year.
With this, we have provided you with a complete breakdown of the cost of a SOC 2 audit. Although a SOC 2 seems expensive, being SOC 2 compliant pays for itself in the long run. You would benefit from –
- Increased revenue as more businesses would be interested in working with you.
- Increased customer reach as your SOC 2 report would serve as a differentiator.
- Save money on fines as your systems will be protected from data breaches.