In our current environment of near constant attacks on data privacy and security, businesses are facing increased compliance laws, and the need to offer proof to customers, business partners, and regulators that they are meeting those requirements.
Here are three major ways a company can achieve those goals and prove to its business parters and others that they are protecting data and compliance.
The American Institute of Certified Public Accountants (AICPA) developed System Organization Control (SOC) testing.
SOC 1 Reports the in-house accuracy of a company's financial statements data, and information technology for its financial executives and compliance officers. These are usually non-invasive, remote reviews for the benefit of and private review by a company's top executives.
SOC 2 Reports the in-house and outsourced activities of a company and its vendors, to assure they are all utilizing agreed upon processes, policies, and security measures to comply with regulations and industry standards that govern their business activities. These reports are for compliance officers, information technology executives, vendor management executives, named business partners, and regulators.
SOC 3 Reports are the same as SOC 2 reports, but stripped down, with details removed, and conclusions highlighted. These are most suitable for a general audience of anyone, including prospective clients, investors, and business partners, interested to know whether they can have confidence in the compliance of the organization's systems.
SOC 1, 2, or 3 Type 1 Reports are single moment in time snapshots of the condition of a company and its system controls.
SOC 1, 2, or 3 Type 2 Reports provide a review of a company and its controls as maintained over a period of time.
SOC Reports can also focus on a specific industry and the regulations most critical to their compliance, such as Cybersecurity, HIPAA, Supply Chain, Cloud Based, SaaS, Education, Financial Institutions, or the Payment Card Industry.
Pen Testing or Penetration Testing is a form of ethical hacking, where an organization retains a third party white hat hacker enterprise to simulate various types of internal and external data security threats, leaks, and vulnerabilities, so management can identify and implement remediations before they become real life situations.
Some businesses may be required to obtain SOC 1, SOC2, or Pen Testing to demonstrate compliance with federal regulations. Other companies engage with highly regulated enterprises and can benefit from knowing these Reports exist and are available for review when choosing subcontractors, vendors, financial institutions, healthcare entities, educational institutions, software, employment entities, and others with whom to do business.
When an entity has successfully achieved a certification of passing a SOC or Pen Test, they can publicize their achievement through press releases and company News Blogs.
“Both private and public entities are increasingly requesting SOC 2 reports as it’s a way for a company to gain peace of mind that their data is being adequately protected,” says Andrew Sizemore, a manager with Clark Schaefer Consulting.