Budgeting for SOC 2: How Much Does a SOC 2 Audit Cost?
SOC 2 compliance plays a key role in your organization’s oversight. This is especially important when the changing environment and popularity of remote work pushes cybersecurity as a top concern for businesses. And with a 68% increase in data breaches this year, the concern is warranted.
Additionally, as your company grows and moves up market, you’ll find that an increasing number of partners, vendors, and customers will require a SOC 2 report.
All of these factors contribute to increasing interest in SOC 2. The problem? For many businesses, understanding the investment—both time and money—that goes into SOC 2 is oftentimes complex. In this guide, we’ll break down average SOC 2 audit costs to help you get a better insight into what you can expect.
Factor in the Size and Complexity of Your Organization
Before we jump into all of the variables that can influence your SOC 2 audit costs, it’s important to factor in the size of your organization.
The size of your organization is usually an indicator of the complexity of your systems being audited and will have a major impact on the costs you can expect.
SOC 2 Type 1
A Type 1 report is a snapshot of security controls. This is an evaluation of a company at a specific point in time by an auditor and focuses only on whether controls are suitably designed.
Typical estimates for a small to midsize company range from $7,500 to $15,000 for the audit alone. However, for larger businesses, this cost could be anywhere between $20,000 and $60,000.
SOC 2 Type 2
Type 2 looks at how well a company’s controls function over a specified period of time, usually three to 12 months. One reason for the greater cost is that the auditor has to evaluate the operating effectiveness of controls in addition to the suitability of the design of the controls.
The audit alone for a small to midsize company for SOC 2 Type 2 reports costs an average of $12,000 to $20,000. For large organizations, total costs can range from $30,000 to $100,000.
8 Audit Costs to Consider
Now, let’s look a little bit closer at what can impact the total cost of the endeavor. These eight elements differ significantly, based on the needs of each unique organization.
Type 1 vs Type 2
In general, a Type 2 audit will be more costly than a Type 1. That’s because a Type 1 report is just a broad picture of an organization’s overall security at a specific point in time. Type 2 audits, however, are significantly more extensive and in-depth, and they also look at how the organization’s established controls perform over time.
Keep this in mind when considering which type of SOC 2 audit you’re going to do.
The time and effort required to conduct a SOC 2 audit vary depending on which Trust Services Categories are included in the scope. You’ll need to consider the complexity of your system, your web applications, and the five Trust Services Categories. These include:
In addition, audit costs could increase if you have multiple custom-developed applications in-scope for your audit and whether or not the applications share the same infrastructure.
Your Team’s Time
When going through a SOC 2 audit, keep your team’s workload and resources in mind. Many companies don’t consider the loss of productivity on other projects early on. The main reason is that it isn’t a readily apparent expenditure to account for. It’s hard to know exactly how much these costs will add up to, but being aware of this is key to not falling behind in other parts of the business.
Hiring a Consultant
Looking for outside guidance is also an option. Experts can help you better understand, prepare, and sort through the difficult tasks that come along with preparing for these audits. However, be sure to do your research before choosing a consultant.
Security Tools and Employee Training
There are a few tools and services you may need to become SOC 2 compliant which will also add to your estimated cost. This can include anti-virus software, password managers, vulnerability scanners, security incident and event management (SIEM) tools, and other native services offered by your cloud service providers.
Additionally, annual online security awareness training—whether provided by a third party such as a cybersecurity firm or in-house—is key to establishing a security-first culture, but there are several costs involved.
First, you have the cost of the training program itself and allocation time for your team to complete the training. You’ll also need to factor in any costs that may come with changes to current workflows as you work towards staying as secure as possible and in compliance.
Another cost you’ll need to consider is penetration testing.
As you prepare for your SOC 2 audit, penetration testing can help identify potential vulnerabilities in your defenses. Through a set of activities performed by security experts, you’ll be able to assess vulnerabilities in your applications, network infrastructure, and physical security barriers. Whether these experts are internal or hired from a third-party company, there will be costs associated with your organization’s penetration test.
At times, some tools require that you purchase a higher-tiered package to access additional security-focused features like multi-factor authentication. So if you’re going for SOC 2, keep in mind that the recurring cost of your tech stack may increase as well.
Compliance Automation Software
Selecting the right compliance automation platform can make the entire SOC 2 audit process easier. Look for a tool that can grow with you and help you monitor system and security settings, build an audit trail, and automate evidence collection. While this may become a recurring cost, streamlining the execution of the audit with software and systems can lead to significant cost and time savings.
Preparing for Your SOC 2 Audit
Once you’re at the stage where you need to prepare for the audit to take place, here are some other things to consider that may impact your total cost.
The gap analysis compares your controls to the relevant Trust Services Criteria and determines what has to be done to comply with them. Gap assessments are critical because they help inform whether or not you’re on the right track. That said, they can also identify areas where more resources may need to be spent to meet the applicable criteria.
Identifying gaps is a good step to take, but it’s only the start. If changes, improvements, or adjustments must be made to be in compliance with security standards, you’ll need to prepare for those. As you may have guessed by now, any changes or improvements to your security program may come with additional costs.
Correcting errors and gaps discovered during your readiness assessment—which can vary from missing documentation to internal controls not working as planned—is part of preparing for a clean SOC 2 report. These factors can also raise the final cost.
Whether you’re starting your journey to SOC 2 compliance or are looking to remain compliant, you’ll need systems in place to help you automate the process. Schedule some time with our team to find out how Drata can help.