SOC 2 certifications are a must for many businesses in 2023 and a nice-to-have for many others. It’s become a defacto measure of economic and cybersecurity health because of the quality and extent of the review, and the easy snapshot it provides into organizational, financial, and cybersecurity health.
Unfortunately, working out your organization’s potential SOC 2 certification cost isn’t incredibly straightforward or transparent. That’s largely because the SOC 2 is an audit conducted by an independent auditing firm where pricing depends on the resources needed to complete the audit. If your business is very complex, requiring many auditors to be onsite, it’s going to be much more expensive than a remote audit of a more simplistic set of business operations.
In this article, I’ll try to put some numbers around key costs of the SOC 2 certification process from the preparation to the audit. Your mileage may vary and organizations may charge more or less than outlined here. There are too many variables to provide costs that are totally accurate, so instead I’ve provided ranges for each cost that should cover organizations at any size.
(NOTE: If you’re considering a SOC 2 certification, our free tool below matches you with top-rated SOC 2 consultants that suit your needs and budget.)
- Overview of SOC 2 Certification
- Factors that Affect SOC 2 Certification Costs
- Breakdown of SOC 2 Certification Costs
- Tips for Reducing SOC 2 Certification Costs
- Costs of SOC 2 Certification Vs Benefits
- Find the Right Compliance Consultant Fast
Overview of SOC 2 Certification
SOC 2 certifications are more accurately named an SSAE 18 SOC 2 assessment. The SSAE 18 is an auditing standard published by the American Institute of Certified Public Accountants or AICPA. Those standards are designed to provide administrative simplicity for how AICPA audits are conducted by licensed members, typically a CPA firm.
Those standards also outline evaluations for different service organizations. Service organizations, in turn, are organizations that provide services to clients related to information systems. There are two kinds of service and organizational control reviews:
- SOC 1 – evaluates the fairness of a service organization’s management’s description of the service organization’s system and controls regarding financial statements.
- SOC 2 – evaluates management’s description of a service organization’s system and the suitability of its controls with respect to the five trust service criteria: security, availability, processing integrity, confidentiality, and privacy of information.
In short, a SOC 1 certification evaluates financial evaluation integrity only, while a SOC 2 evaluates technical compliance integrity based on the trust services criteria.
Neither certification standard specifies a control set or security framework against which they should be measured. SOC 2 compliance can be evaluated against HITRUST, NIST CSF, ISO 27001, or any number of other industry standard frameworks.
Instead, they focus on consistent and measurable internal controls. They are designed to provide reasonable assurance that service organizations are operating effectively and consistently.
Organizations pursuing SOC 2 compliance can opt for one of two assessments:
- Type I – measures organization controls efficacy for a specific point in time.
- Type II – measures organization controls efficacy over an entire year.
Notably, the SOC 2 audit doesn’t necessarily demonstrate the quality of security controls. Instead, it simply provides an attestation that the controls were validated and that an information security program exists. However, the SOC 2 report will outline control deficiencies impacting operating effectiveness in the form of a gap analysis and require the implementation of a remediation plan.
Factors that Affect SOC 2 Certification Costs
Various factors will affect SOC 2 certification cost. Those factors vary based on the size and complexity of the audit, which is determined by what’s being audited and the size and complexity of the audited organization.
Cost Factor #1: Scope
The first major impact on total cost is the scope of the audit. A SOC 2 audit could apply to some of an organization’s technical infrastructure or the entire company. Most companies opt for a scope of review for some amount less than the entire company. What is appropriate for your company really comes down to where you process or maintain client data and what supports that.
Cost Factor #2: Operational Complexity
You’ll also want to consider the complexity of your operations. If you have very complex and interconnected infrastructure, that infrastructure may be difficult to evaluate and difficult to segment for assessment and minimize audit scope to what’s absolutely necessary. Both will require more dedicated auditors or push the assessment timelines out. Conversely, simple and compartmentalized infrastructure will streamline the audit process and minimize auditor costs.
Cost Factor #3: Type II or Type I
Also impacting scope is whether your organization will pursue a SOC 2 Type I or a SOC 2 Type II assessment. The kind of SOC 2 audit you pursue increases or decreases the scope and complexity of the audit, thereby impacting costs. If your top concern is identifying that you have security controls in place, then a Type I assessment may be right for you.
That can answer, for example, whether or not you have the following in place:
- Security tools
- Security training and other employee training
- Data protection policies
- Password managers
- Antivirus software or other antimalware safeguards
- Vulnerability scanners
- Other security infrastructure
The Type I assessment will make a determination that security tools and controls performing as they should to protect data stores and other customer data at the assessed point in time.
The Type II assessment will highlight the quality of the organization’s oversight for an entire year. This is helpful where there’s reason to question the quality of ongoing safeguard performance. Positively, that could be because your organization stores and processes large swaths of sensitive client information. Negatively, that could be because of one or more data breaches that call the quality of organizational safeguards into question.
Cost Factor #4: How Many Trust Services Criteria?
Another major impact on cost is how many trust services criteria will be assessed. Typically, all five are assessed, but a smaller subset of them may be assessed if one of the trust services criteria is inapplicable or unimportant. For example, a system processing publicly available information may not be hugely concerned with the confidentiality or privacy of information.
Cost Factor #5: Auditor Costs
You’ll also want to think about auditor costs. If you need auditors to come onsite because of how data is stored, the volume of data, or your company’s documentation and requirements related to the external transfer of data, then picking a geographically distant auditing firm may substantially increase total costs. Depending on where your business is located and what you do, for example, if it’s a niche specialty, you may not have a choice.
Cost Factor #6: Internal Preparation Costs
Finally, you’ll need to consider internal preparation costs. If you don’t have a continual risk management or security compliance program, then preparing for a SOC 2 audit can result in significant compliance costs. You may need to collate information, implement new tools or additional security tools, engage in staff training for the effort, and other measures to bolster audit readiness.
There’s also a potentially significant opportunity cost in the form of lost productivity involved with conducting an internal readiness assessment to figure out what it takes to reach compliance with SOC 2. Those are largely driven by costs involved with staff and other resource encumbrance to support a determination if you’re even ready to pursue a SOC 2 audit. If you’re very much not audit-ready, then the audit costs will be wasted money.
Breakdown of SOC 2 Certification Costs
So how much does a SOC 2 audit cost? Most online sources quote a general cost for a SOC 2 audit being between $50,000 and $250,000, just in audit fees. That’s a pretty wide range, driven by many of the cost factors outlined in the last section. Here are some rough numbers for different SOC 2 audit cost factors.
To achieve SOC 2 certification, you’ll need a qualified opinion from a CPA firm certified by the AICPA. That puts a significant cost premium on SOC 2 audits by providing a barrier to entry for firms to provide SOC 2 compliance opinions. As highlighted above, that can drive a cost between $50,000 and $250,000.
Type I audit cost will be significantly less than Type II audit cost. That’s because the evaluation of point-in-time compliance requires significantly less review than continuous compliance. It’s the difference between an auditor’s review of one data point per item evaluated to multiple data points per item. That results in exponential increases in cost.
Ultimately, you’re likely paying on an hourly rate arrangement and not a fixed fee for auditing services. So audit fees depend on the audit team’s time to complete the audit. The easier it is for the team to find the information they need, the less expensive the audit.
Another key difference driving higher cost is using one of the Big 4 audit firms instead of another firm. You will pay a premium for those very well-known–and very sought-after–audit firms. Company politics–your board, executive leadership, in-house legal team, and others–may demand those higher-profile auditors.
Do they absolutely perform better in all situations? I think that’s difficult to tell. Will anyone question your decision to pursue an opinion from one of those firms? Absolutely not. You can think of those increased audit costs as insurance that your SOC 2 audit is procedurally unassailable.
If your auditors are required to travel, they’ll likely expect to be compensated for travel costs, including flights, hotel, and per diem food expenses. Most auditors include travel compensation provisions in their engagement contracts.
Market forces, time of year, and location will impact all of those. On a per-auditor basis, expect to spend anywhere between $200 and $500 per flight. You should also expect to spend $100 to $300 on hotel costs and around $50 per day for food. So per auditor upkeep cost will be between $1,150 and $2,750 per week. Costs can be significantly higher if you’re in a major (and expensive) city, but there should be local personnel available so you shouldn’t have to pay travel expenses.
If you have well-prepared and easily digestible materials and reports, that will reduce audit cost because your auditors will spend fewer hours reviewing materials. Conversely, less well-organized materials can result in increased audit costs.
Material preparation isn’t free, though. Your staff and others will need to assist with that preparation. That can include in-house readiness assessments, legal fees for compliance and privilege efforts, conducting a framework baseline gap analysis, and other work to demonstrate implementation efforts that will be evaluated during the SOC 2 audit.
If you have a compliance or governance, risk, and compliance department, then your organization is likely doing this continually. Therefore it’s a recurring cost your organization already pays for and won’t detract from other projects. Conversely, if you don’t have a strong compliance program already doing this, you’ll need to assign staff to this effort. That can result in lost productivity in other areas. Oftentimes, it’s more cost-effective to internalize those costs, but it might not always be.
Remediation and Maintenance Costs
When your SOC 2 audit is complete, you’ll be presented with an assurance letter and a gap analysis, which effectively make up the SOC report you’ll use internally. That gap identification will identify areas of non-compliance with the evaluated framework.
This is one place where a readiness assessment helps drive costs down. Readiness assessments, if conducted correctly, can tell you if you meet the requirements of your current framework and where you stand over time.
(NOTE: Our free matching tool can connect you with an experienced consultant for SOC 2 readiness assessments)
You may, for example, find that achieving compliance with the security framework of your choice requires:
- New security tools
- Responsibility assignment of roles and activities for consistent risk mitigation
- Mapping workflow to find gaps in controls
- Additional tools
- Regular security awareness training or other security training
So you’ll identify other costs and potentially be able to leverage current or defense-in-depth infrastructure to identify mitigations. , if you have a constantly changing environment or have experienced recent changes, then you’ll want to evaluate how those impact your security standing.
A readiness assessment may also inform whether you conduct a Type I or Type II assessment. If you have substantially new or changed security infrastructure and responsibility assignments, then it’s unlikely you’ve driven consistency over time. A snapshot may be more appropriate, which will drive down costs for that SOC 2 compliance assessment.
In short, the more you put into the audit through a readiness assessment and other preparatory activities, the more you’ll get out of it and the more cost-effective the audit may be.
Tips for Reducing SOC 2 Certification Costs
There are a few ways to drive SOC 2 compliance and certification costs. Many of them are outlined above:
- Think about having a continuous risk monitoring and management program to internalize some costs, reduce the cost of external audits, and regularize consistent security practices. Not only will that help you on audits, but it’ll also help you be more secure and protect client data more robustly.
- Identify whether you need a Type I or Type II certification. Type I certifications are typically less expensive and can suffice in many cases.
- Work with internal risk management groups to identify other potential savings, like conducting the audit remotely. Ultimately, those other cost savings need to be balanced against considerations of the need for a SOC 2 assessment.
Costs of SOC 2 Certification Vs Benefits
This really boils down to the question: how much does a SOC 2 letter and report mean to your organization?
The SOC 2 report is a fantastic way to show ongoing compliance with security frameworks. Overall, it can represent a very high degree of compliance with the chosen framework. If done well, it can also highlight significant areas of improvement.
Depending on your industry, it may be more of a “must” than a “nice to have.” If most of your industry peers have a SOC 2 report, then you may be at a significant competitive disadvantage not having one. Where it’s an expectation and you don’t meet the expectation, you may lose customers to competitors who do.
That being said, SOC 2 assessments can be costly. If you’re a startup, $50,000 may be an unmeetable cost. There may be other assessments you can leverage that cost less and highlight conformance with relevant frameworks.
Whether you opt to pay for a SOC 2 assessment or not depends entirely on your organizational situation and circumstances. While there are many benefits to a SOC 2, the cost can be a significant downside. You must evaluate that downside and compare it to the many upsides certification can bring.