How much does it cost a SOC2 audit?

Today in the third post about SOC2, and after talking about tips to accelerate the SOC2 audit and How to get SOC2 certification in four steps, we will deal with a topic that interests many of us. How much does it cost a SOC2 audit? How to avoid wasting money on your SOC2 audit.

Why is it increasingly important for your company to have such a certification?

Cybersecurity is a significant concern for businesses, even more so with the changing environment and the rise of remote working. A SOC2 report will provide detailed information on whether your company meets the trusted services criteria and implements controls or organizational capabilities related to customer data security, confidentiality, or privacy. The purpose of SOC2 standards is to provide confidence to organizations when dealing with third-party vendors that they are handling customer information securely and correctly.

As we have seen in the previous posts, there are two types of SOC2 audits, and the main difference in audits is time: the time it takes to perform the audit as the amount of time covered within the audit review.

So we all want to have answers to the question;

How much does a SOC2 audit cost?

In 2021, the total SOC2 audit cost varies depending on:

1. The size of the company being audited and.
2. The complexity of the audit.

Considering that within SOC2 certification, we have Type I and Type II.

A Type I SOC2 audit report is less expensive than a Type II audit because the report is only tested to cover the company at one point in time rather than over a review period. This makes it less extensive than a Type 2. In general, budgets range from $10,000 to $60,000 for Type 1 reports and $30,000 to $100,000 for Type 2 reports.

Many variables cannot set a preset price without considering a specific context about the company's needs and objectives.

The first step as a company that you should take into account is what type of audit you want to perform and from there:

How much does a type 1 SOC2 audit cost?

The SOC2 audit cost of a type 1 audit usually has an initial fee of between $10,000 and $60,000. This SOC2 certification certifies that a company's policies, technology, and procedures are compliant at a certain point in time. This readiness assessment is a review to determine if the company is prepared to pass SOC2 security and compliance reviews and can be done internally.

A Type 1 report shows the security represented by an auditor's review of a company, and estimates typically start at $10,000. A Type 2 audit is more comprehensive and demonstrates that the company understands the security procedures and complies with them for up to twelve months.

One thing to keep in mind before deciding which type of SOC2 audit you want to get is that many vendors and customers require the more vital Type 2 report with more security assurances.

So if it is possible for your company, it may be more cost-effective to skip Type 1 and go directly to Type 2 reports.

And now you may be wondering;

How much does a Type 2 SOC2 audit cost?

The SOC2 cost of a Type II audit typically ranges from $30,000 to $100,000.

The differentiating point of this type with type I is the extended review period from 3 to 12 months, and that additional time and review is the reason for the higher cost.

Another point to consider is other costs that may be involved in SOC2 certification.

Before performing a SOC2 audit, we know that as fixed costs, we will have to deal with the audit provider's general fees and other expenses that need to be taken into account before we start. But additional costs may arise during the audit process.

1. Tools for cybersecurity: While preparing for the audit, companies may need additional tools to achieve compliance. Examples include software to help with background checks of team members, security updates to employee laptops such as hard drive backup and encryption, anti-virus software, etc.
2. Team training: Some teams choose to conduct cybersecurity training, either in-house or through an outside company. This ideally incorporates data security practices into the team's processes and comes at an additional cost but can be critical to maintaining internal controls.
3. Legal costs: An in-house legal team or external lawyers will review agreements with external customers and suppliers, ensuring that all criteria are met.
4. Internal team opportunity cost: It is essential to consider the opportunity cost of internal employees who may delay already underway projects. Since any time spent by team members assisting in the SOC2 compliance process will be time taken away from other responsibilities, that may mean that other projects are delayed or deprioritized.

Another question many companies ask before deciding whether to perform a SOC2 audit is: What does a SOC2 audit include?

A Type I report generates a report based solely on a date, a specific point in time that will assess the company.

A Type II audit, performed over several months, is a comprehensive report, which provides greater assurance and requires more time and capital investment.

In addition, the audit will also ensure that your company does or does not meet the AICPA's (American Institute of Certified Public Accountants) SOC2 fiduciary services criteria.

Finally, regarding the frequency with which our company should perform SOC2 reports, we usually start with a SOC2 Type I audit and follow up the following year and in the next years with Type II reports. But the AICPA also recommends that companies perform a SOC2 audit annually, as any account more than one-year-old is considered obsolete and is not valuable to the company or its partners and suppliers.

After knowing how much a SOC2 audit costs for both type I and type II, how long it will take your company to perform it, how often it needs to be repeated, we want to give you some simple keys to avoid wasting money on your SOC2 audit.

How to avoid wasting money on your SOC2 audit?

-Select and be clear about which audit you want to perform and which of the two types of audits best fits your company's needs at that moment.

-Plan your audit ahead of time and prepare all the necessary documents in advance so that everything will be faster at the time of the audit, and the auditors will spend less time.

-Take seriously your company's security by implementing systems that automate access to your employees, user provisioning, and maintain the internal security of all your data efficiently and securely.

With MyLenio, we can help your company count on the most popular SaaS integrations and applications such as Jira, Slack, Bitbucket, and Github. You will be able to configure which resources each of your teams will use. Also, you will manage your directory with User Provisioning, software designed to help organizations manage user information faster, more cost-effectively, reliably, and securely across multiple systems and applications. MyLenio will provide you with automatic permissions and security in accessing the group of your most sensitive data.

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