What is SOC 2 Compliance, and Why Does it Matter for Your Business?

In today’s digital-first world, safeguarding sensitive data isn’t optional — it’s a baseline expectation. As organizations evaluate technology partners and service providers, data security and privacy are often top of the list. SOC 2 compliance is one of the most widely recognized frameworks for demonstrating that a business takes those responsibilities seriously. 

Below, we’ll explore what SOC 2 compliance covers, which organizations it applies to, and why it matters for reducing risk, building credibility, and maintaining customer confidence.

What is SOC 2 Compliance?

System and Organization Controls (SOC) 2 compliance is a widely accepted assurance framework created by the American Institute of Certified Public Accountants (AICPA). At its core, the SOC 2 meaning is simple: it’s a way for a business to demonstrate that the systems it uses to run its operations — and handle customer data — are designed to be secure, reliable, and privacy-focused.

“Systems and Organization Controls” refers to the internal processes, technologies, and safeguards a company uses to manage data across its organization. The AICPA developed the SOC framework to bring consistency and credibility to how companies validate these controls through independent audits.

SOC 2 compliance applies primarily to SaaS providers, technology companies, and organizations that store, process, or transmit sensitive customer information. For these businesses, SOC 2 serves as a trusted signal to customers, partners, and stakeholders that data protection is built into their operations, not treated as an afterthought.

To achieve SOC 2 compliance, companies must undergo a vigorous examination that includes:

• Scope identification to determine the systems and processes relevant to customer data.

• Risk assessment to identify potential risks to data security and privacy.

• Implement control measures to mitigate identified risks, including access controls, encryption, and monitoring systems. 

• Gap analysis to assess existing controls against SOC 2 requirements to identify gaps.

• Remediation to address identified gaps through process improvements or additional controls.

• Audit preparation involves gathering evidence to assess control effectiveness and readiness for the audit.

• Conducted an audit (performed by an independent auditor) to assess the effectiveness of controls and compliance with SOC 2 criteria. 

• Report issuance to view a detailed SOC 2 report on the organization’s readiness.

The SOC 2 Trust Services Criteria Explained

The SOC 2 Trust Services Criteria define how an organization protects customer data and ensures its systems operate responsibly. These criteria form the foundation of SOC 2 controls and are used by independent auditors to assess whether a company’s practices align with expectations regarding security, reliability, and privacy. 

Below is a more detailed breakdown of each criterion — what it covers, why it matters to customers, and the type of controls typically evaluated. 

1. Security

Security focuses on protecting systems and data from unauthorized access, breaches, or misuse by employing controls such as access controls, multi-factor authentication, and network security protections. This is the core of SOC 2 and applies to every SOC 2 report.

For customers, strong security controls provide confidence that their data won’t be exposed, altered, or accessed by the wrong people. Strong security controls reduce the risk of breaches that can lead to financial loss, reputational damage, and regulatory fallout.

2. Availability

Availability evaluates whether systems are accessible and operating as intended, especially during periods of high demand or unexpected disruption. It looks at how organizations prepare for outages and maintain service reliability over time.

Customers rely on consistent access to the tools and data they need to run their businesses. SOC 2 controls related to availability often include uptime monitoring, backup and recovery procedures, redundancy planning, and processes for responding to service interruptions.

3. Processing Integrity

Processing integrity ensures that systems function correctly and that data is processed accurately, completely, and in a timely manner. This criterion focuses on whether outputs can be trusted to reflect intended inputs. 

From a customer perspective, processing errors can create downstream issues like inaccurate reporting or failed transactions. Controls in this area may include data validation checks, system testing, error detection mechanisms, and monitoring for incomplete or failed processes. 

4. Confidentiality 

Confidentiality addresses how sensitive information — like proprietary data or contractual information — is protected from unauthorized access or disclosure. SOC 2 controls evaluated here often include encryption, data classification practices, access limitations, and secure data retention methods. This helps assure customers that their confidential information be secure and protected throughout its entire lifecycle. 

5. Privacy

Privacy focuses on how personal data is collected, used, retained, and disposed of in accordance with an organization’s stated privacy commitments. Examples of SOC 2 controls in this area include privacy notices, consent management practices, data retention policies, and employee training on privacy. 

For customers, privacy controls help ensure personal information is not misused or kept longer than necessary.

SOC 2 Type I vs. Type II: What’s the Difference?

There are two different types of SOC 2 reports the AICPA offers: SOC 2 Type 1 and SOC 2.

SOC 2 Type I looks at an organization’s cybersecurity controls at a specific point in time. The goal of this report is to determine whether the controls in place can sufficiently safeguard customer data. Type I reports focus on the design of SOC 2 controls, not how long or how consistently they’ve been used. 

A SOC Type II report takes it a step further by evaluating both the design and operational effectiveness of these controls over a period of time, typically several months. Instead of a snapshot, Type II demonstrates how well controls actually work in practice as the business operates on a day-to-day basis. 

SOC Type II reports generally provide stronger assurance, which may be more important for some organizations. A Type I report can demonstrate readiness and intent, while a Type II report shows sustained performance and reliability. As a result, most businesses — especially SaaS and cloud-based providers — use SOC 2 Type II reports to build deeper trust and meet customer or procurement expectations.

Why SOC 2 Compliance Matters for Your Business

SOC 2 compliance provides peace of mind by safeguarding customer data and setting stringent standards for data protection. Additional SOC 2 benefits include:

• Customer trust: SOC 2 compliance demonstrates a commitment to data security and privacy, increasing trust in customers. 

• Competitive advantage: Compliance can differentiate a service provider in a competitive market by providing assurance of data protection. 

• Legal and regulatory compliance: Meeting SOC 2 requirements helps fulfill legal and regulatory obligations related to data protection and security. 

• Risk management: By identifying and addressing potential security risks, SOC 2 compliance helps mitigate the risk of data breaches and associated liabilities. 

Is SOC 2 a Certification?

A common misconception is that SOC 2 is a formal certification. In reality, SOC 2 compliance is not a certification or a pass/fail badge. Instead, it’s the result of an independent audit that evaluates how well an organization’s security and privacy controls align with the SOC 2 Trust Services Criteria.

Following the assessment, the auditor issues a SOC 2 report that provides an opinion on the design and effectiveness of those controls over a specified period. This means organizations don’t “get certified” in SOC 2 — instead, they demonstrate transparency and accountability by sharing an objective report that explains how their controls operate in practice.

Who Needs SOC 2 Compliance?

Any organization that stores, transmits, or processes customer data or provides technology-enabled services where security, availability, and privacy are critical. More simply, if your business stores, processes, or transmits sensitive information (or supports other companies that do), SOC 2 is often expected. 

SOC 2 compliant companies commonly include:

• SaaS companies that host customer data or provide subscription-based software.

• Cloud service providers offering infrastructure, storage, or managed services.

• Fintech organizations handling financial data, payment information, or transactions.

• Healthcare and health technology companies managing protected health information or patient data.

• Data processors and third-party vendors that support regulated or enterprise clients.

• Technology partners required to meet customer, procurement, or contractual security requirements. 

How Long Does SOC 2 Compliance Take?

Several factors influence the SOC 2 timeline, including the type of report, the maturity of your existing controls, the audit scope, and the overall business size. For a SOC Type I report, the process typically takes 2-4 months, while a SOC Type II report usually requires 3-6 months or more, depending on how long the auditor needs to observe and test your controls. 

Ultimately, the timeline is influenced by factors such as the complexity of your systems, the number of Trust Services Criteria in scope, and the resources allocated to prepare for the audit.

SOC 2 vs. Other Compliance Frameworks 

SOC 2 compliance is often compared to other compliance and assurance frameworks, which can make it difficult to distinguish each one. While they all relate to risk and controls, they serve different needs. Understanding differences like SOC 2 vs. SOC 1 and SOC 2 vs. ISO 27001 helps organizations choose the framework that aligns with customer and industry expectations. 

In short, SOC 2 is designed to build customer trust around data protection, SOC 1 centers on financial controls, ISO 27001 provides a global security framework, and HIPAA applies specifically to healthcare data. Many companies utilize SOC 2, alongside other frameworks, depending on their industry and specific customer requirements.

Security and Accessibility You Can Trust

At AudioEye, protecting customer data is a core part of our approach. Our SOC 2 compliance reflects our commitment to maintaining a secure, reliable, and compliant platform for managing digital accessibility at scale. We prioritize strong security controls to help organizations meet compliance requirements while safeguarding sensitive information.