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A SOC 2 Type 2 report is an internal controls report capturing how a company safeguards customer data and how well those controls are operating. Companies that use cloud service providers use SOC 2 reports to assess and address the risks associated with third party technology services.

SOC 2 audits can only be conducted by a licensed CPA firm or agency accredited by the American Institute of Certified Public Accountants (AICPA). In addition, the auditor or auditing firm must be a completely independent CPA, which means they have no relationship with the service organization they're auditing.

A SOC 2 Type II report focuses on the American Institute of Certified Public Accountants (AICPA) Trust Service Criteria (formerly the Trust Service Principles). It examines a service provider's internal controls and systems related to security, availability, processing integrity, confidentiality, and privacy of data.

What is a SOC 2 audit report? A SOC 2 audit report provides detailed information and assurance about a service organisation's security, availability, processing integrity, confidentiality and privacy controls, based on their compliance with the AICPA's TSC, in ance with SSAE 18. It includes: An opinion letter.

Report from the auditor. The first section of a SOC 2 report is a summary of the audit provided by the auditor. ... Management assertion. The management assertion allows the company to make claims about the audited systems and controls. ... System description. ... Tests of controls. ... Other information.

How do you review your vendor's SOC 2 reports? Step 1: Familiarize yourself with the scope and objectives. ... Step 2: Assess the auditor's opinion. ... Step 3: Evaluate control descriptions. ... Step 4: Validate control effectiveness. ... Step 5: Analyze complementary user entity controls. ... Step 6: Evaluate monitoring and incident response.

The SOC 2 compliance cost for Type 2 reports typically ranges between $7000 ? $50000. Again, the costs depend on your organization's size, complexity (of systems & controls), audit readiness, TSCs chosen and the type of auditor. That said, the costs do add up when you include readiness assessments and other overheads.