Trust & Compliance: Common Questions
We live in an age of deep concern regarding data security and security threats. Savvy customers and enterprise level clients are less likely to sign contracts with partners and SaaS providers that can’t prove they take data security seriously, and potential financiers are unlikely to back startup companies that haven’t yet cleared the path to these types of contracts by procuring this proof. In 2018, trust and security are both essential for companies that hope to attract business and compete in the larger marketplace.
So how can growing companies that handle sensitive data (and almost every company handles sensitive data) gain a respected form of certification from an outside auditor? What kind of auditing process can independently attest to the company’s due diligence and preparation against hacks and exposure? Enter the world of compliance.
What type of compliance standard can you help with?
We help our clients based on their needs. The majority of our contracts involve SOC-2, HIPAA, and most recently GDPR. Feel free to ask us if we can help with your particular case. If we aren't able to, we can most likely recommend you to someone who can.
How long does a SOC-2 engagement usually take?
We move as fast as our clients are able to make progress. Our fastest client to date got their SOC-2 Type I six months after signing our engagement letter. That record is up for grab if you are up for it.
In our experience however, it takes 9-12 months to achieve a SOC-2 Type I, and 3-6 additional months to obtain a SOC-2 Type II report.
Which standard do you follow for your security policies?
All of our security policies follow the ISO-27001 standard. The Confidentiality, Integrity, and Availability standards cover the range of standards we like to work with: SOC-2, HIPAA, and GDPR very well.
Why do we have to become SOC-2 compliant if we are relying on AWS which is already compliant?
SOC-2 stands for Service Organization Control, meaning your clients are interested in understanding your controls, not your hosting provider’s control. As part of your vendor assessment we recommend reviewing AWS’ SOC-2 report, but relying on their report is not enough to become SOC-2 compliant.
Who Stands Behind SOC-2?
The American Institute of CPAs. The AICPA is an established and respected organization that provides two forms of certification to companies that demonstrate evidence of a secure data-protection infrastructure. A Type I is a point in time audit that addresses the company’s description of its system, the suitability of the system’s design, and the effectiveness of its internal data controls. A Type II report happens over a period of time and emphasizes design and also focuses on the validity of the company’s controls. You can read more about it here.
Are SOC-2 Reports a Legal Obligation?
No, but most enterprise level organizations that engage with sensitive data (again, almost all of them) have an obligation to their stakeholders to prove due diligence regarding data security, which means they’ll want to vet their service providers using this tool. SOC-2 can help these prospective service providers set themselves apart from the competition. Just as important, a SOC-2 report represents a meaningful and respected signifier of trust.
What Can Happen to a Startup Company without a SOC-2 Report?
A lack of a SOC-2 report won’t result in legal problems, but it can and will limit outside assessments of the company’s commitment to data security. When large-scale clients look for providers, or large- scale backers look for a likely return on their investment, they don’t want concerns about security to stand in the way. Trust is a chain made of links that have each been put the test and have proven their ability to withstand pressure and scrutiny. Company leaders are wise to let SOC-2 auditors apply this pressure so their clients and backers don’t have to.
When is it Too Late for a SOC-2 Audit?
Never. Even companies that have been in business for years but have never obtained a SOC-2 report can—and should—take steps in this direction now. Being compliant with SOC-2 can open the door to a broader base of more significant clients and larger contract opportunities. That being said, startups in the threshold of the marketplace, and new business owners who hope for an eventual public offering, should obtain a SOC-2 report during the development and financing process. By the time the company approaches Series B and C fundraising rounds, a report should be well in hand.
How Complicated is the Auditing Process?
The auditing process can be easy, or complicated depending on your level of preparation.
Preparing for the audit can take some time, attention, and the guidance of reliable data security experts. Don’t leave any part of this process to chance. Approach SOC-2 certification one step at a time, and start by contacting a consulting firm with track record of experience in your area of the marketplace.