Whether you are trying to gain entry into a new market or secure the trust of your existing customers, System and Organization Controls 2 (SOC 2) certification makes your journey smoother. Many businesses are unsure of the costs that come with SOC 2 compliance. However, SOC 2 compliance cost is an investment in your company’s future rather than a sunk cost. You can reap the benefits of SOC 2 certification to gain more business opportunities.
The cost of a SOC 2 audit varies anywhere between $60K and $220K. No need to get overwhelmed; let’s break down every criterion one by one to determine the approximate cost of your SOC 2 audit.
What is the breakdown of components in the SOC 2 audit cost?
Typically, the SOC 2 audit cost includes not only the audit but also several other pre- and post-audit tasks, as mentioned below.
| Cost | Approximate amount |
| Pre-audit preparation costs | $15-20k |
| Third-party audit firm fees | $5-60k |
| Remediation and post-audit costs | $25-80k |
| Ongoing compliance maintenance costs | $10-60k |
| Total cost of SOC 2 audit | $60-220k |
By understanding the breakdown of these cost components, organizations can make informed decisions and allocate resources wisely throughout their SOC 2 compliance journey. Proper planning and prudent investments will pave the way for a secure and cost-effective path to SOC 2 compliance.
Let’s delve into the key elements that contribute to the overall expenses:
1. Pre-audit preparation costs
The pre-audit preparations are divided into three categories:
a. Internal staff training and awareness
Preparing the organization for a SOC 2 audit begins with educating internal staff about the audit objectives, security best practices, and their role in compliance. Training programs and awareness initiatives incur costs but are vital in building a strong foundation for the audit.
b. Internal control review and gap analysis
Conducting a thorough review of existing internal controls is crucial to identify gaps in security practices. A comprehensive gap analysis helps organizations address weaknesses and implement necessary controls to align with the SOC 2 requirements.
c. Policy and procedure development and documentation
Creating and documenting robust policies and procedures tailored to the SOC 2 criteria requires time and resources. Organizations may need to invest in specialized expertise to ensure thorough and accurate documentation.
2. Third-party audit firm fees
When an organization engages a third-party audit firm to carry out the SOC 2 audit, their fees are based on
a. Fixed vs. variable fee structures
Engaging a third-party audit firm to conduct the SOC 2 assessment incurs specific fees. Some firms may offer fixed fee structures for specific audit services, while others may have variable fees based on the organization’s size and complexity.
b. Factors influencing third-party audit costs
The level of expertise and reputation of the audit firm, the complexity of the organization’s operations, the chosen SOC 2 report type (Type I or Type II), and the geographical spread of the organization are some factors influencing third-party audit costs.
3. Remediation and post-audit costs
The organization incurs the following costs after the said audit is completed.
a. Addressing audit findings and recommendations
Following the audit, organizations must address any findings or recommendations identified during the assessment. Rectifying deficiencies and implementing necessary improvements may incur additional expenses.
b. Necessary system upgrades and improvements
To meet SOC 2 requirements, organizations may need to invest in system upgrades and security enhancements. These improvements are vital for bolstering data protection measures and aligning with industry standards.
4. Ongoing compliance maintenance costs
The SOC 2 audit should be a continuous process.
a. Annual renewal expenses
SOC 2 compliance is not a one-time event; it requires annual renewal to maintain the certification. Organizations must allocate budgetary resources for this recurring cost.
b. Continuous monitoring and reporting
To uphold SOC 2 compliance, continuous monitoring of internal controls and security practices is essential. Implementing monitoring tools and systems incurs ongoing expenses.
Read also: Understanding SOC 2 Reports: A Comprehensive Guide
Factors that influence the SOC 2 audit cost
The cost of a SOC 2 audit is not the same for every organization. It varies dramatically depending on many factors, including but not limited to the type of certification, the number of trust service criteria (TSC) included in the audit, the size of your organization, and the complexity of the internal controls of your organization.
Read also: 5 best practices for a successful SOC 2 audit
Tips for cost optimization and efficient SOC 2 audit preparation
Preparing for a SOC 2 audit can be a complex and resource-intensive process, but with strategic planning and cost optimization, organizations can streamline the journey without compromising on quality. By focusing on key areas such as automation, documentation, and risk-based prioritization, businesses can not only reduce expenses but also ensure a smoother, more efficient audit process. Here are essential tips to guide them on their journey:
1. Planning ahead and setting realistic timelines
- Initiate the SOC 2 compliance journey early and establish a well-defined plan with clear objectives and timelines.
- Engage all relevant stakeholders, including management, IT, and security teams, to ensure alignment and commitment to the compliance process.
- Set realistic deadlines for each stage of the audit preparation to avoid last-minute rushes and potential cost escalations.
2. Integrating SOC 2 requirements into existing security practices
- Integrate SOC 2 requirements seamlessly into the organization’s existing security practices and policies.
- Identify overlaps between SOC 2 criteria and other compliance frameworks, such as ISO 27001 or HIPAA, to streamline efforts and reduce redundant tasks.
3. Leveraging automation and technology
- Invest in automation tools and technologies that can streamline the audit process and reduce manual efforts.
- Automated monitoring and reporting systems can help organizations maintain continuous compliance, thereby minimizing the need for manual interventions.
4. Utilizing internal resources effectively
- Assess the skills and expertise within the organization to determine the extent of external assistance required.
- Allocate tasks wisely among internal resources to maximize their efficiency and reduce dependence on external consultants.
5. Conducting periodic self-assessments
- Conduct regular self-assessments to evaluate the organization’s readiness for a SOC 2 audit.
- Identify gaps and address them proactively, reducing the need for costly remediation efforts later on.
Also read: 5 best practices for a successful SOC 2 audit
Decoding the cost of SOC 2 audit
Achieving SOC 2 certification is more than just a compliance checkbox; it’s a strategic investment that can significantly enhance your company’s market credibility and operational security. While the costs of SOC 2 compliance can seem daunting, understanding the factors that influence these costs enables businesses to plan effectively and allocate resources smartly.
By approaching the process with the right combination of internal readiness, strategic planning, and smart investments—like automation tools and expert guidance—you can optimize the cost of SOC 2 compliance while reaping its long-term benefits. Ultimately, the journey to SOC 2 certification, when executed thoughtfully, strengthens trust with your customers and positions your organization for sustained growth and competitive advantage.
Ready to simplify your SOC 2 journey? Scrut automates and streamlines your entire compliance process, helping you achieve certification faster and at a fraction of the cost. With continuous monitoring, easy documentation, and expert guidance, Scrut takes the stress out of SOC 2 compliance.
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FAQs
The cost for SOC 1 and SOC 2 audits can vary significantly based on factors like organization size, scope, and complexity. Typically, a SOC 1 audit can cost between $20,000 and $60,000, while SOC 2 audits range from $60,000 to $220,000. Additional costs for readiness assessments, remediation, and ongoing monitoring may also apply.
The cost of an AICPA SOC 2 audit generally falls between $60,000 and $220,000. The actual cost depends on factors such as the scope of the audit, the number of trust service criteria involved, and the type of report (Type 1 or Type 2).
A SOC 2 audit typically takes between 3 to 12 months. Type 1 audits, which focus on the design of controls at a specific point in time, usually take a few months. Type 2 audits, which evaluate the operational effectiveness of controls over a period, require more time—often 6 to 12 months.
No, not any CPA can perform a SOC 2 audit. Only CPA firms that are registered and licensed by the American Institute of Certified Public Accountants (AICPA) and have specific experience in information security audits are qualified to conduct SOC 2 audits.
SOC 2 audits must be conducted by a licensed CPA firm that specializes in information security and has relevant experience performing them. The firm must also be accredited by the AICPA.
Yes, SOC 2 audits are typically conducted annually. While the initial certification can cover a specific period, organizations often undergo annual audits to maintain compliance and to provide stakeholders with updated reports.
SOC 2 audits are not legally mandatory, but they are often required by clients, especially in industries like SaaS, IT, and cloud services. Obtaining SOC 2 certification helps demonstrate that your organization meets industry data security and compliance standards, which can be crucial for business growth and customer trust.
