SOC 2 Compliance Guide: Audit, Checklist & Requirements

SOC 2 stands for System and Organization Controls 2. It’s part of a reporting standard suite developed by the American Institute of Certified Public Accountants (AICPA). 

The “2” specifically refers to reports on controls at a service organization relevant to a system’s security, availability, processing integrity, confidentiality, and privacy.

Think of SOC 2 as the evolution of internal control reporting for the cloud era. While SOC 1 focuses on financial reporting controls, SOC 2 addresses the operational and security controls that matter most when you trust another organization with your data.

SOC 2 compliance means successfully meeting the requirements outlined in the AICPA’s SOC 2 framework. However, it’s important to understand that SOC 2 isn’t a checklist you either pass or fail; it’s a framework for reporting on controls.

A SOC 2-compliant organization has undergone an independent audit that evaluates its controls against one or more of the five Trust Service Principles. The auditor doesn’t issue a “pass” or “fail” grade; instead, they provide a detailed report describing the controls in place and any exceptions or deficiencies identified.

From my experience reviewing these reports, their real value lies in their transparency. A SOC 2 report tells you exactly what controls exist, how they’re implemented, and where there might be gaps. This level of detail is invaluable when making risk-based decisions about vendor relationships.

SOC 2 compliance is important because it verifies that a company manages customer data securely according to standardized criteria, reducing risk and increasing trust. It is especially critical for SaaS providers and cloud-based services handling sensitive information.

• Risk management and due diligence – In my role on the SaaS governance team, SOC 2 reports were often the first filter in our vendor evaluation process. They provided standardized insight into a vendor’s security posture without requiring us to craft custom security questionnaires for each evaluation. This standardization saved countless hours and ensured we weren’t missing critical control areas.
• Regulatory requirements – Many industries require organizations to validate the security controls of their service providers. SOC 2 reports provide the documentation needed to satisfy auditors and regulators. I’ve seen organizations struggle with compliance audits simply because they couldn’t demonstrate adequate vendor oversight. SOC 2 reports solve this problem.
• Competitive advantage – For service providers, SOC 2 compliance has become table stakes in enterprise sales. I’ve witnessed procurement processes where vendors without SOC 2 reports were automatically disqualified, regardless of their actual security posture. The report signals investment in security and operational maturity.
• Customer trust – SOC 2 reports provide transparency that builds trust. Rather than asking customers to “trust but not verify,” organizations can point to independent validation of their controls. This transparency is particularly valuable in the current landscape, where security breaches make headlines daily.

SOC 2 is built around five Trust Service Principles: security, availability, processing integrity, confidentiality, and privacy. 

Not every organization needs to address all five. The selection depends on the nature of the services provided and customer requirements.

1. Security (required for all SOC 2 reports)

Security forms the foundation of every SOC 2 report. This principle addresses the protection of system resources against unauthorized access, use, disclosure, damage, or loss. Key areas include access controls, logical and physical security, system monitoring, and incident response.

In practice, I’ve found that security controls often reveal the most about an organization’s overall maturity. Well-implemented access controls and monitoring capabilities usually indicate broader operational discipline.

2. Availability

Availability addresses system accessibility for operation, monitoring, and maintenance as agreed upon in service-level agreements. This includes network security, backup and recovery procedures, and environmental protections.

3. Processing integrity

This principle ensures that processing is complete, valid, accurate, timely, and authorized. It’s particularly relevant for organizations handling financial transactions, data transformations, or automated decision-making processes.

4. Confidentiality

Confidentiality goes beyond basic security to address the protection of confidential information. This includes data classification, handling procedures, and disposal practices. It’s essential for organizations handling sensitive customer data or proprietary information.

5. Privacy

Privacy addresses the collection, use, retention, disclosure, and disposal of personal information under privacy policies and applicable privacy laws. 

A SOC 2 audit examines an organization’s controls. The auditor evaluates the design and operating effectiveness of controls related to the selected Trust Service Principles.

• Control environment assessment – The auditor examines the organization’s governance structure, risk assessment processes, and overall commitment to integrity and ethical values. This includes reviewing organizational charts, policy documents, and management’s risk management philosophy.
• Control activities review – Specific control activities are tested through observation, inquiry, and examination of evidence. For example, if an organization claims to perform quarterly access reviews, the auditor will examine documentation of these reviews and verify their completeness.
• Information and communication systems – The auditor evaluates how the organization identifies, captures, and communicates information needed to support the functioning of internal controls. This includes examining how control deficiencies are identified and communicated to management.
• Monitoring activities – The examination includes how the organization monitors the quality of internal control performance over time. This involves reviewing management’s monitoring procedures and how they identify and correct control deficiencies.

Who can perform a SOC 2 audit?

SOC 2 audits must be performed by licensed Certified Public Accountants (CPAs) or CPA firms. However, not all CPAs are qualified to conduct SOC 2 audits; they need specific training and experience in the SOC 2 framework and the five Trust Services Criteria.

When selecting an auditor, look for firms with demonstrable experience in your industry and service type. The audit quality and the resulting report can vary significantly based on the auditor’s expertise and thoroughness.

Who needs a SOC 2 report?

Clients in regulated industries (like finance or healthcare) or enterprises that must evaluate third-party risk often require an SOC 2 report. Startups seeking to sell to larger companies or enter security-conscious markets also pursue SOC 2 to meet vendor assessment requirements and build trust with customers.

• Service organizations – Any organization providing services to other entities should consider SOC 2 reporting, particularly if they handle customer data or provide critical business functions. This includes cloud service providers, SaaS companies, data centers, payroll processors, and managed service providers.
• Organizations with regulatory requirements – Companies in regulated industries often need SOC 2 reports from their service providers to satisfy regulatory requirements. This is common in financial services, healthcare, and government contracting.
• Enterprise customers – Large organizations typically require SOC 2 reports from their critical vendors as part of their third-party risk management programs. Having a SOC 2 report can significantly streamline the vendor onboarding process.

Can you fail a SOC 2 audit?

Technically, you cannot “fail” a SOC 2 audit in the traditional sense. SOC 2 is a reporting framework, not a certification. 

However, the audit can result in findings that make the report less valuable for business purposes.

Types of findings:

• Control deficiencies: Situations where controls are not designed effectively to meet Trust Service Principles
• Material weaknesses: More severe deficiencies that significantly impact the achievement of control objectives
• Exceptions: Instances where controls didn’t operate as designed during testing

From my experience reviewing reports, findings aren’t necessarily deal-breakers. What matters is the organization’s response to findings and its remediation plans. Some of the best vendors I’ve worked with had findings in their reports but demonstrated clear action plans for addressing them.

How long does SOC 2 take, and what does it cost?

A typical SOC 2 Type I audit takes 4-8 weeks from start to finish. In contrast, a Type II audit requires a minimum observation period of three months and additional fieldwork and report preparation time. First-time audits often take longer as organizations need time to implement and mature their controls.

SOC 2 audit costs vary widely based on organization size, complexity, the number of Trust Service Criteria included, and auditor selection. The initial audit typically costs $15,000 to $100,000+, whereas annual updates generally cost less.

You shouldn’t underestimate the internal effort required. Organizations typically need to dedicate significant time from IT, security, compliance, and business stakeholders throughout the audit process. This internal effort often represents a larger investment than the external audit fees.

Understanding the differences between Type I and Type II reports is crucial for both service organizations and their customers. 

Type I is faster to complete but less rigorous, whereas Type II demonstrates consistent operational adherence over time, making it the more comprehensive and widely requested report.

SOC 2 Type I

Type I reports provide a point-in-time assessment of control design. The auditor evaluates whether controls are suitably designed to meet the Trust Service Principles, but doesn’t test their operating effectiveness over time.

From a vendor assessment perspective, Type I reports are useful for understanding what controls exist but provide limited assurance about their consistent operation. They are typically a starting point rather than sufficient evidence for ongoing vendor relationships.

SOC 2 Type II

Type II reports examine the design and operating effectiveness of controls over a specified period (a minimum of three months, typically six to twelve months). The auditor performs detailed testing to verify that controls operated effectively throughout the observation period.

Type II reports provide significantly more assurance and are generally preferred for ongoing vendor relationships. They demonstrate not just that controls exist on paper, but that they function consistently in practice.

Choosing between Type I and Type II

Organizations new to SOC 2 often start with Type I to establish their baseline and identify areas for improvement before committing to the more extended observation period required for Type II. 

However, most customers and regulatory requirements expect Type II reports for ongoing assurance.

SOC 1, SOC 2, and SOC 3 differ primarily in scope, purpose, and audience. SOC 1 focuses on financial reporting controls, SOC 2 covers operational controls related to trust principles, and SOC 3 is a simplified, public-facing version of SOC 2.

Each report type serves distinct use cases: SOC 1 for financial auditors, SOC 2 for technical risk reviewers, and SOC 3 for general stakeholder reassurance.

• SOC 1 reports – SOC 1 focuses on controls relevant to financial reporting. These reports are primarily used by organizations whose services could impact their customers’ financial statements. SOC 1 reports are restricted-use documents available only to the service organization and its customers.
• SOC 2 reports – SOC 2 addresses security, availability, processing integrity, confidentiality, and privacy controls. These reports are also restricted in use but focus on operational rather than financial controls. SOC 2 is the most relevant for technology service providers and SaaS companies.
• SOC 3 reports – SOC 3 reports are general-use versions of SOC 2 reports that can be distributed publicly. They provide high-level information about control objectives and the auditor’s opinion, but don’t include detailed descriptions of controls or test results. SOC 3 reports are useful for marketing purposes but provide limited value for detailed risk assessments. In my vendor evaluation experience, they rarely provide sufficient detail for enterprise procurement decisions.

When you entrust your infrastructure-as-code (IaC) pipelines to an external platform, you’re really handing over three things: control of sensitive credentials, visibility into what’s changing, and confidence that tomorrow’s run will behave exactly like today’s. Spacelift is engineered so you never have to surrender those assurances.

Spacelift is audited against SOC 2 Type II and its controls are aligned to GDPR. You authenticate through single sign-on (SAML 2.0 or OIDC), inheriting your IdP’s MFA rules and user-lifecycle management.

With Spacelift you also get:

• Private worker pools that you host, giving you full control over OS hardening, network egress, and secrets management. Run state is end-to-end, asymmetrically encrypted. Only your pool’s private key can decrypt it.
• OIDC-based cloud roles and short-lived API tokens — no static keys.
• Audit trail allows you to record all actions, changes, and events that happen inside your Spacelift account. You can ensure data integrity, thus protecting sensitive information and maintaining user trust.
• Policies to control what kind of resources engineers can create, what parameters they can have, how many approvals you need for a run, what kind of task you execute, what happens when a pull request is open, and where to send your notifications.
• Stack dependencies to build multi-infrastructure automation workflows with dependencies, having the ability to build a workflow that, for example, generates your EC2 instances using Terraform and combines them with Ansible to configure them.
• Blueprints provide self-service templates so dev teams can launch new environments without waiting on ops. They can also surface directly in a ServiceNow catalog for ITSM approvals.
• Contexts package shared environment variables, files, or hooks so you write them once and reuse them safely everywhere.
• Drift detection with optional auto-reconciliation to keep reality in sync with code.

If you want to learn more about Spacelift, create a free account today or book a demo with one of our engineers.

SOC 2 compliance represents an investment in security and operational maturity. When implemented thoughtfully, it provides value far beyond meeting customer requirements; it creates a foundation for scalable, secure operations that can support business growth and customer trust. 

Implementation recommendations:

• Engage experienced auditors who understand your industry and service model.
• Invest in control automation where possible to reduce manual effort and human error.
• Establish ongoing monitoring and measurement of control effectiveness.
• Treat SOC 2 as part of your broader risk management program, not a compliance checkbox.
• Communicate the value of SOC 2 investments to stakeholders beyond just meeting customer requirements.

As someone who has seen both excellent and inadequate SOC 2 implementations, I can confidently say that organizations that embrace SOC 2 as a business enabler rather than a compliance burden consistently achieve better outcomes for both their security posture and their customer relationships.