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Why Choosing a High-Quality SOC 2 Auditor Matters More Than You Think
Many companies are attracted to the most affordable choice when seeking a SOC 2 certification. It is logical—adhering to rules can cost a lot, thus it's beneficial to cut down costs. Nonetheless, when it comes to SOC 2, the classic saying "you get what you pay for" remains entirely accurate. This blog will discuss the importance of choosing the correct auditor for your SOC 2 certification and how skimping on costs can end up being more expensive for your company later on.
What is SOC 2 Certification?
SOC 2, or System and Organization Controls 2, is a structure utilized for assessing an organization's internal controls concerning data security, availability, processing integrity, confidentiality, and privacy. Businesses go through SOC 2 audits to demonstrate to their clients, associates, and authorities that they are protecting confidential data in line with recognized criteria.
Significantly, a U.S.-licensed Certified Public Accountant (CPA) is necessary to perform each SOC 2 audit, as mandated by the American Institute of Certified Public Accountants (AICPA), the organization overseeing these certifications.
The Real Cost of "Cheap" SOC 2 Certifications
Recently, there has been an increase in the number of companies providing SOC 2 automation services at very affordable prices. These platforms guarantee to streamline the compliance process by automating it, simplifying a potentially complicated and time-consuming certification. Yet, if you come across a price that seems too good to be true, it is recommended to delve deeper into the matter. Inexpensive SOC 2 certifications carry undisclosed dangers.
Many inexpensive SOC 2 vendors make up for their reduced prices by offering lower payments to their auditors. This presents a number of issues, primarily because low-paid auditors are encouraged to conduct numerous certifications without dedicating enough time or effort to thoroughly evaluate your company's controls.
The Importance of a Diligent Auditor
A successful SOC 2 audit entails more than simply ticking off boxes. CPAs in the United States must adhere to stringent regulations set by the AICPA and are highly motivated to accurately evaluate a company's SOC 2 controls. If a CPA fails to thoroughly assess a company's security measures before approving a SOC 2 certification, they may be subjected to disciplinary measures by the AICPA. These repercussions extend past individual penalties and can damage the overall reputation of the auditing firm, which may serve other prominent clients in financial reporting, tax services, and broader compliance structures.
For auditing firms, having SOC 2 certification is just a minor component of their overall portfolio. If U.S.-based auditors approve a SOC 2 report that doesn't meet proper standards, it can put their entire book of business at risk, so they have a strong incentive to ensure accuracy.
Non-U.S. Auditors: Different Incentives, Different Risks
Although auditors from other countries can obtain licenses, their motivations may not be in line with the strict supervision of American auditors. If a foreign auditor faces penalties for incorrectly endorsing a SOC 2 certification, the repercussions are typically less harsh, and the auditing company can easily substitute them with another certified CPA. The reputation damage for these businesses is usually minimal, and as a client, you may be unaware if your auditor is taking shortcuts.
Your company may be at risk without noticing due to the decreased accountability. If your company issues a false certification, there could be serious legal, reputational, and financial consequences in the future.
SOC 2 Auditors Are Like Insurance Providers
One way to think of SOC 2 certification is like how auto insurance works. Some insurance companies provide basic coverage to meet legal requirements, while others offer comprehensive protection that genuinely supports you in times of need. Likewise, SOC 2 auditors have the option to issue a certification solely for the sake of having it, or conduct a comprehensive assessment to verify your company's true adherence to industry regulations.
How to Choose the Right SOC 2 Partner
When choosing a SOC 2 vendor, it is essential to consider more than just the cost. You require a vendor that collaborates with a trusted U.S.-licensed auditing firm that will carefully assess your systems and controls. Having an experienced auditor is crucial for ensuring your company's compliance and safeguarding its reputation.
Reducing expenses in this area could offer short-term savings, but it might also make you vulnerable to higher risks. Instead, consider investing in a top-notch SOC 2 audit to ensure your company has comprehensive protection beyond just its reputation.
Koop’s customer assurance platform helps tech companies seamlessly navigate the complexities of business insurance, regulatory compliance, and security automation in one place.
We provide a comprehensive suite of insurance coverage that includes General Liability, Technology Errors & Omissions, Cyber Liability, and Management Liability coupled with the most cost-effective SOC 2 compliance certification on the market.
Ready to learn more? Visit our website at https://www.koop.ai or drop us a note at hello@koop.ai.
