SOC 2 Explained: What Growing SaaS Companies Need to Know
A practical guide to SOC 2 readiness, Trust Services Criteria, Type I vs. Type II, evidence collection, audit preparation, and the most common mistakes growing SaaS companies encounter.
Agistech's GRC practice focuses on SOC 2 readiness, compliance automation, AI governance, cloud security, and practical control implementation for growing organizations. Agistech provides readiness and implementation support; only an independent CPA firm can perform a SOC 2 examination and issue the resulting report.
SOC 2 in One Minute
SOC 2 is not simply a checklist or security certification. It is an independent attestation report that evaluates whether an organization's controls relevant to selected Trust Services Criteria are suitably designed and, for Type II, operating effectively over a defined period.
For growing SaaS companies, SOC 2 often becomes important when enterprise customers, investors, or procurement teams want evidence that the company has a structured approach to security, availability, confidentiality, privacy, or other relevant controls.
SOC 2 at a Glance
Why SOC 2 Comes Up for SaaS Companies
For many SaaS companies, SOC 2 enters the conversation during an enterprise sales cycle. A prospective customer may ask for a current SOC 2 report, send a security questionnaire, or require specific security controls before approving the vendor.
The challenge is that SOC 2 is not just about writing policies. Companies need to demonstrate that their controls are properly designed, implemented, and consistently operated.
That means areas such as access management, security monitoring, vendor management, incident response, employee onboarding and offboarding, change management, risk management, and evidence collection all need to work together.
What Does SOC 2 Actually Evaluate?
SOC 2 is based on the AICPA's Trust Services Criteria. The criteria include:
- Security — protection of systems and information against unauthorized access, disclosure, or damage.
- Availability — whether systems are available for operation and use as committed.
- Processing Integrity — whether system processing is complete, accurate, timely, and authorized.
- Confidentiality — protection of information designated as confidential.
- Privacy — controls related to the collection, use, retention, disclosure, and disposal of personal information.
AICPA & CIMA Trust Services Criteria
Security is generally included in every SOC 2 examination. Other criteria may be included depending on the company's services, risks, customer expectations, and audit scope.
SOC 2 Type I vs. Type II
Type I
A Type I report evaluates whether relevant controls are suitably designed and implemented as of a specified date.
Type II
A Type II report evaluates the design and implementation of relevant controls and also provides evidence about whether those controls operated effectively over a defined observation period.
The choice should be driven by customer requirements, business risk, organizational maturity, timing, and discussions with the CPA firm performing the examination.
How the SOC 2 Process Typically Works
1. Define the scope
Start by identifying the systems, products, services, organizational units, locations, and Trust Services Criteria that should be included.
2. Perform a readiness assessment
Compare current practices against the controls required for the selected scope. Typical areas include IAM, change management, logging, vulnerability management, incident response, vendor management, risk management, and employee lifecycle controls.
3. Remediate control gaps
Remediation may involve implementing technical safeguards, documenting procedures, improving access controls, formalizing policies, establishing monitoring, and assigning control ownership.
4. Establish evidence collection
Controls need evidence showing what was performed and, where applicable, when and by whom it was performed.
This is one area where GRC automation platforms can reduce repetitive manual work by connecting systems to controls and collecting evidence on a recurring basis.
5. Complete the audit or examination
An independent CPA firm performs the SOC 2 examination and issues the resulting report. A GRC consultant can assist with readiness and implementation, but the independent CPA firm performs the attestation engagement.
SOC 2 Readiness Checklist
Before beginning an examination, growing SaaS companies should consider whether they have working processes for:
- Identity and access management
- Multi-factor authentication and privileged access
- Employee onboarding and offboarding
- Security awareness training
- Change management
- Vulnerability and patch management
- Security monitoring and logging
- Incident response
- Risk assessment and risk management
- Vendor and third-party risk management
- Business continuity and disaster recovery
- Data protection and encryption
- Documented policies and procedures
- Recurring control evidence collection
Common SOC 2 Readiness Mistakes
1. Treating SOC 2 as a documentation project
Policies matter, but policies alone do not demonstrate that controls operate effectively. The operational process behind each control is what ultimately matters.
2. Starting the observation period too early
For a Type II examination, organizations need to consider whether controls are actually ready to operate consistently before beginning the relevant observation period.
3. Collecting evidence manually
Manually requesting screenshots and reports from engineers, HR, IT, and other teams can quickly become a recurring administrative burden.
4. Ignoring vendor risk
SaaS companies often depend on numerous cloud, infrastructure, payment, analytics, and business software providers. Those dependencies should be incorporated into the company's broader risk-management process.
5. Choosing scope without considering customers
SOC 2 scope should be aligned with the company's services, risks, customer expectations, and business strategy rather than simply attempting to include everything.
What Actually Drives SOC 2 Cost?
The total cost of a SOC 2 program is broader than the CPA examination fee.
Companies should consider:
- CPA examination fees
- GRC platform costs, if applicable
- Internal engineering and security resources
- Policy and documentation work
- Control remediation
- Evidence collection and ongoing monitoring
- External readiness or implementation support
For many growing companies, the largest hidden cost is internal time spent coordinating controls and collecting evidence. Building repeatable processes early can reduce that operational burden as the company scales.
Practical Recommendations
- Start with customer requirements. Understand what your target enterprise customers actually request.
- Define scope before buying tools. Establish systems, services, criteria, and organizational boundaries first.
- Perform a readiness assessment. Identify control gaps before committing to an audit timeline.
- Assign control owners. Every important control should have someone responsible for its operation.
- Automate repetitive evidence collection where practical. Automation can reduce recurring administrative work.
- Think beyond the first audit. SOC 2 should become part of the organization's ongoing security and governance operating model.
Where GRC Automation Can Help
A GRC platform can help organizations connect controls, policies, evidence, systems, and responsible owners in one operating workflow.
Agistech provides GRC implementation and compliance automation services for organizations preparing for SOC 2 and other security and compliance requirements.
Agistech is also a Drata implementation partner, supporting organizations with implementation, evidence workflows, control configuration, and readiness activities.
Frequently Asked Questions
What is SOC 2?
SOC 2 is an attestation framework developed by the AICPA that evaluates controls relevant to selected Trust Services Criteria such as Security, Availability, Processing Integrity, Confidentiality, and Privacy.
What is the difference between SOC 2 Type I and Type II?
Type I evaluates controls as of a specified date. Type II also evaluates whether relevant controls operated effectively over a defined period.
How long does SOC 2 take?
The timeline depends on the organization's starting maturity, scope, remediation requirements, auditor availability, and report type. Type II additionally requires an observation period before the examination can be completed.
Do we need a GRC platform for SOC 2?
No. A GRC platform is not inherently required. However, automation can make evidence collection, control monitoring, ownership, and recurring compliance activities easier to manage, particularly as an organization grows.
Can a consultant issue our SOC 2 report?
No. Readiness consultants can help prepare an organization, but the independent CPA firm performing the examination issues the SOC 2 report.
Planning Your SOC 2 Program?
If an enterprise customer is asking for SOC 2, don't start with the audit date. Start by understanding your scope, control gaps, evidence requirements, and implementation timeline.
Talk With Agistech About SOC 2 Readiness →Agistech helps growing companies assess, implement, and operationalize GRC programs, including SOC 2 readiness and Drata implementation.