SOC 2 Budgeting – How Much Does SOC 2 Cost in 2020?

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SOC 2 compliance is a standard from the AICPA (American Institute of CPAs). It defines the criteria for managing customer data using the five trust principles of security, availability, processing integrity, confidentiality, and privacy. In this guide, the goal is simple – to cover a few salient SOC 2 issues related to budget.

The total cost for both types of SOC 2 audit is very different from a SOC 1 audit. SOC 2 is expensive. An understanding of the components above is crucial to determine the full cost to the organization.

Most experts agree that quoting a price for a SOC 2 audit without any additional context or information is highly subjective. There’s no single SOC 2 audit size that precisely fits all. Reports may be as small as 25 pages or more than 100 pages. It’s obvious why a service auditor cannot quote a flat rate for every SOC engagement. For more information on the whole process, see our Complete SOC 2 Compliance Guide.

How Much Does SOC 2 Type 1 Audit Cost?

You’ll need to fork out a starting cost between $20,000 and $60,000 for a SOC 2 Type 1 audit. A SOC 2 Type 1 audit involves passing the SOC 2 audit and proving that the business’ policies, procedures, and technologies comply with the framework’s current requirements.

These estimates don’t account for additional compliance-related expenses such as:

  • Readiness assessment – an independent assessment made by a consultant as to whether your systems will pass SOC 2
  • Dedicated in-house employee(s) or consultants
  • All technical work, cultural changes, or training your business needs to put appropriate controls in place.
  • Legal fees, associated with reviews of agreements with outside vendors.

The readiness assessment is an optional review, but it ensures a smooth Type 1 report process. The size of your company and the level of support needed also contribute significantly to the cost.

It’s important to review all customer agreements, vendor and contractor agreements, and employment agreements, as their data protection policies affect your data and thus your SOC 2 readiness. These agreements build a robust framework of responsibility assignment, allowing you to make policy assertions concerning confidentiality, privacy, and security. These may require annual revisions with each audit, something to factor in for this ongoing SOC 2 cost.

How Much Does SOC 2 Type 2 Audit Cost?

SOC 2 costs from $20,000 to more than $80,000. The complexity of the infrastructure plays a crucial role in determining the final cost. SOC 2 Type 2 certifications are a natural progression from the Type 1 report. This type of audit can take a while – anywhere between six months to a year.

The factors that play into the cost of a SOC 2 Type 2 audit include:

  • The scope of services in the report
  • The trust services criteria (TSC) you choose to include
  • The size of your organization
  • The number of in-scope processes and systems

As a given, the more systems and processes need to be audited, the more expensive your audit will be, and every system that affects client data must be audited.

Other Potential SOC 2 Costs

It’s essential to be sure about the price if you invest a significant amount of time and money for a SOC 2 audit.

Productivity Costs

Bear in mind that the employees that’ll commit to the SOC 2 process will do so throughout the project. Meaning, they’ll have to take time off their other tasks to focus on the audit.

This loss in productivity is not something many businesses consider (at least not early enough). The primary reason is that it’s not an obvious cost to account for.

The responsibility involved is not a job for your junior staff, IT, or security team. It’s an initiative driven by a person familiar enough with technical systems to manage the team’s time efficiently.

Staff Training

Staff training is a vital SOC 2 audit cost. It can be helpful to begin annual security awareness training, either through a third party (usually a cybersecurity firm) or in-house. This is an educational program designed to insinuate data security into your employee’s processes. Starting cost for a typical third-party program runs ~$1000 for 50 employees.

As a given, training comes with its own costs.

Build vs. Buy Decisions

Your current infrastructure and security outlook may demand that you roll out new tools, especially as your SOC 2 program garners steam. These tools will:

i. collect asset inventory

ii. generate tickets to capture compliance tasks

iii. manage security and compliance reporting

iv. detect threats and intrusions

v. file integrity monitoring, and

vi. vulnerability management

There’ll be a constant debate about whether to build or buy these tools. You’ll want to build if you have the in-house resources to feasibly create these systems. On the other hand, if your business is smaller or simply doesn’t have development resources on-hand, it might be best to buy these systems. Each one’s cost is dependent on firm size, but taken together a mid-market company can expect to spend from 5-15K here.

Time and budget go a long way to determine whether you build or buy. The perfect example would be whether to opt for extensible open-source Access Onboarding & Termination Policy tools at first or to adopt another solution if your company wishes to move faster.

SOC 2 Audit Services

The auditing firm you choose is highly essential to the entire SOC 2 auditing process. As we’ve said, it doesn’t have to be a big firm. However, the firm has to know its options thoroughly. One non-negotiable requirement your company should have is to choose a firm with extensive auditing experience.

The firm you select should then proceed with identifying the employees who will complete your audit. The firm must conduct background checks on those who will have access to your customer data.

Something that other businesses overlook, but which holds excellent potential for the outcome of the SOC 2 audit process, is to ask for – and check out – references before hiring an audit firm. The chosen firm should also have experience in your industry or domain.

In general, your first options for a SOC 2 audit service provider include:

1. The Big 4 accountancy firms: These are the firms you probably dream of engaging – Deloitte, Ernst & Young, KPMG, or PricewaterhouseCoopers. Their footprint is everywhere. One big downside is their sky-high fees. As a startup, you can consider other options suitable for your current financial position.

2. Mid-tier and boutique accountancy firms: While you may prefer to work with a Big 4 firm, note that your auditor’s reputation only matters to a certain extent. Because they are smaller, they maintain a lower opportunity cost and lower risk of brand damage. Their fees are more moderate.

3. Cybersecurity CPA firms: These firms understand the business of accounting. More importantly, they know the domains of IT and information security. Their focus is SOC 2 and related technology, and not on financial statement audits.

Those who own and run these firms usually have plenty of experience from any of the Big 4. Their costs are significantly lower and their operations more efficient.

Use Blissfully for Your SOC 2 Audit

One comprehensive tool to help with your SOC 2 audit is Blissfully. It can streamline any complex, time-intensive, and mind-bending process, Blissfully offers a more comprehensive and clearer overview of SaaS apps across your organization. It’ll help you onboard employees with the appropriate apps before they hit the ground running.

Blissfully ensures that your company’s entire SaaS footprint is always organized, providing workflows and automation to manage collaboratively, control, and track changes across the organization.

If your team is effectively distributed, you’ll need more efficient ways to run your business and manage customers. Blissfully understands how to make this work effectively for your business.

Blissfully empowers your entire organization throughout the SOC 2 audit process, helping you to manage third-party vendors and implement a stringent IT approval process. Once your process is in one place, your chosen auditor can get to work quickly. Blissfully will significantly ramp up your edge in negotiation. You’ll get more power and control over renewals, and save thousands of dollars in SaaS costs over time.

Blissfully is built for compliance. If your company cares about managing IT and IT security, then use Blissfully. According to Cisco, 75 percent of enterprise workloads will be SaaS-only by 2021.

Conclusion

Quite a few services give you absolute control over the SOC 2 audit process. Blissfully would tell your teams what they need to know in real-time. Visibility is priceless in distributed IT management, making SOC 2 compliance even more critical. Blissfully is proven to empower teams to drive productivity using the apps they’re most comfortable with. Contact us today and give Blissfully a deserved trial.