Cloud-based software is quickly becoming the delivery model of choice for organizations around the world. Its unique, secure, and highly flexible model makes it ideal for businesses of all sizes, and is precisely why there has been an extensive shift to cloud technology and the use of cloud service providers (CSPs). By the end of 2018, approximately 96-percent of all organizations were using cloud technology in some form or another, and corporate spending on cloud services and technologies is expected to reach $277 billion worldwide by 2021.
What has always made the cloud so appealing to organizations is how efficient it is. The cloud provides its users with a highly flexible model for simplified IT management, remote access, and mobility. Combine that with a system that can be fully customizable, requires far less hardware to maintain, and supports multi-platform integration, it’s easy to see why cloud services are so sought after.
However, despite all of the many features cloud services provide organizations, cloud technology can leave many buyers and users with an uncertain feeling about the security of their information and private data. Information leaks and security breaches cost organizations billions of dollars a year. A single data breach can be catastrophic for companies of any sizes. The uncertainty cloud users feel about the security of their information is unquestionably rooted in reality, and is a legitimate concern felt by many business leaders and organizations.
With every breach that captures national headlines, users become more concerned about the levels of security their CSPs are providing them. Now that the vast majority of organizations have adopted cloud technology, there is a much greater demand among them for security and information assurance. The last decade saw the proliferation and widespread use of cloud technology. In the coming years, the saga of cloud services will evolve from cloud adoption and use, to cloud security and information controls.
Although there is no official third-party governing the solution to cloud security risks, a SOC 2 assessment and audit is rapidly becoming the cross-industry standard for security assurance.
A New Level of Security Assurance
SOC 2 is a certification developed by the American Institute of Certified Public Accountants (AICPA) that cloud service providers use to certify their environment, including technologies, protected. A main component of the SOC 2 focuses on how client data is stored and protected, and addresses many of the concerns felt by organizations that are apprehensive about the potential security risks that the cloud poses.
For these organizations, a SOC 2 provides assurance that a cloud service provider is effectively implementing security measures and protecting data. It outlines defined control activities and measures how well a service provider protects its data. It can be used to validate a user’s decision to deploy cloud services in their organization.
For companies assessing potential cloud providers, a SOC 2 offers transparency. The AICPA established five Trust Services Criteria in which auditors may base the effectiveness of a CSPs’ controls.
- Common Criteria – The basic assessment for a SOC 2 examination is an analysis of the CSPs’ overall security. This portion of the audit determines how well the system is protected from unauthorized access. The common criteria look at risk levels around data breaches, DDoS attacks, and account hijacking – the most prevalent security threats faced by CSPs.
- Availability – This additional criteria determines whether the system is available for operation and use as previously committed by the CSP or agreed upon between the CSP and a user.
- Processing Integrity – A vital component for many cloud users, the processing integrity criteria of a SOC 2 assesses whether the system processing is valid, accurate, timely, and authorized. Proper controls around user authorization helps secure an organization from malicious insiders.
- Confidentiality – Assures information is being protected by the CSP to a high standard. Because data breaches typically relate to the exposure of confidential information, this trust service criteria affirms a low threat risk.
- Privacy – This criteria provides assurances that information is collected, used, retained, and disclosed in conformity with the standards and criteria set forth by the AICPA.
Now that most organizations are deploying cloud services in some capacity, more and more of those organizations will seek a broad assessment of their cloud service provider’s security and controls. Even without compliance and requirements set forth by clients, CSPs need to consider the benefits of a SOC 2. Possessing a SOC 2 functions as a form of approval from the AICPA and the SOC auditors that a CSP vendor is safeguarding the data of their clients in a superior way.
As the remaining companies switch to cloud services and others assess the security of their current CSP, a SOC 2 becomes the primary motivator. It stands as the most recognized assessment for cloud security when it comes to vendor compliance, and for users, it provides the answers to their cloud security concerns.
If you’d like to discuss how our team can help with your SOC examination needs, contact us to speak with an expert on our SC&H Audit team. Download our eBook, “A Comprehensive Guide to SOC Reports” to learn additional pertinent and valuable information around SOC examinations, report types, finding the right auditor, and much more.