What is Soc 2 Compliance and Why is it Important?

September 28, 2021

Protecting consumer data should be of utmost importance for organizations. In a world of increasing cybersecurity threats and data breaches, now is the time more than ever to put policies and procedures in place to ensure your customers are protected. If a company does not take measures to protect consumer data this could leave important information vulnerable to hacks and ultimately allowing for distrust in the organization. Organizations that are Soc 2 certified can bring consumers and fellow institutions at ease knowing that all measures are being taken to keep their data safe.

What is Soc 2 Compliance 

Soc 2 was developed by the American Institute of CPA’s (AICPA) to provide for how organizations should manage customer data. Firms that are Soc 2 compliant pursue rigid auditing procedures to ensure that data is securely managed throughout their organization in connection with the organization’s service providers.

There are 2 Types of Soc Reports 

  • Type 1 - Describes a vendor’s systems and whether their design is suitable to meet relevant trust principles
  • Type 2 - Details the operational effectiveness of those systems

Soc 2 follows 5 “Trust Service Principles” 

Security, Availability, Processing Integrity, Confidentiality, and Privacy 

Image From https://www.dashsdk.com/resource/soc-2-trust-services-criteria-tsc/

Which Industries Receive Soc 2 Compliance?

Managed Services, Banking and Financial Services, Software-as-a-Service (SaaS), Data Centers and Colocation Facilities, and Healthcare are all industries that benefit from Soc 2 compliance and protecting consumer data.

What are the steps to Receive Soc 2 Compliance?

Step 1) Bring In Credible Outside Auditors

Step 2) Select Security Criteria for Auditing 

Step 3) Building a Roadmap to Soc 2 Compliance 

Step 4) The Formal Audit 

Step 5) Certification and Recertification - Annual Audits

What does this mean for ModernTax?

ModernTax recently received it’s Soc 2 Type I certification and is on the way to receive Soc 2 Type 2 certification. This allows for ModernTax to continue serving its clients & their customers with the highest level of security and protection.

ModernTax is your solution to all things tax data

Our team is ready to help your HR department or developers customize your tax data solution

Get Access
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.