A SOC 2 audit is a widely recognized assessment that evaluates the SOC 2 controls and processes to protect data privacy, security, availability, processing integrity, and confidentiality. It provides assurance to stakeholders that your organization’s systems are operating securely and effectively. However, SOC 2 audit costs can vary based on different factors. 

 

In this article, we will explore the factors influencing SOC 2 audit costs and shed light on the various cost components involved. 

 

Overview of SOC 2 

 

The SOC 2 framework was established by the American Institute of Certified Public Accountants (AICPA). It is based on five trust principles: Security, Availability, Processing Integrity, Confidentiality, and Privacy. These principles define the common criteria against which a service organization’s controls are evaluated during the audit.

 

There are two main types of SOC 2 reports: Type I and Type II. The Type I report evaluates the design and implementation of controls at a specific point in time, while the Type II report assesses the effectiveness of controls over a period (usually six months). The Type II report is more comprehensive and generally expensive due to the extended evaluation period.

 

Factors influencing SOC 2 audit costs

 

The scope of the SOC 2 audit is a critical factor that affects its cost. Organizations with multiple systems, business units, or locations will have a broader scope, leading to increased audit complexity and higher costs.

 

The factors that influence SOC 2 audit costs are:

 

• Size and complexity of the organization: Larger organizations with complex infrastructures and multiple business lines will likely have higher SOC 2 audit costs. The number of employees, customers, and third-party vendors can also impact the scope of the audit.

 

• Number and types of systems/processes to be audited: The more systems and processes that need evaluation, the more time and effort the auditors will need to invest. Each additional system may add to the overall cost.

 

• Geographic locations and data centers involved: If an organization operates across multiple geographic locations or uses data centers in different regions, the auditors may need to travel to these locations for on-site assessments. This can lead to additional expenses.

 

• Industry-specific requirements: Certain industries, such as healthcare or financial services, may have specific compliance requirements and regulations that demand more thorough audits, contributing to increased costs.

 

• Previous audit history and remediation efforts: Organizations with a history of failed audits or significant control deficiencies may require more extensive remediation efforts before a subsequent audit. Addressing these issues can add to the overall cost.

 

SOC 2 audit costs

 

Following are different SOC 2 audit costs which may differ based on your organization’s unique requirements.

 

SOC Type 1 vs. Type 2 audit costs

 

A SOC 2 Type 1 audit evaluates the design and implementation of controls at a specific point in time. In contrast, a SOC 2 Type 2 audit assesses the effectiveness of controls over a specified period, typically six months. Due to the extended evaluation period, Type 2 audits are generally more comprehensive and, consequently, more expensive than Type 1 audits.

 

• SOC Type 1 audit costs: Estimated expenses for a SOC 2 audit for small to midsize companies generally fall within the range of $7,500 to $15,000 for the audit alone. Conversely, larger businesses may encounter significantly higher costs, spanning anywhere from $20,000 to $60,000.

 

• SOC Type 2 audit costs: SOC 2 Type 2 audit expenses typically average between $12,000 to $20,000, specifically for small to midsize companies. However, the overall costs can vary significantly for larger enterprises, extending from $30,000 to $100,000.

 

 

Additional SOC 2 audit costs

 

The average cost estimate for a SOC 2 audit typically falls within the wide range of $5,000 to $60,000. Nevertheless, the expenses involved extend beyond the auditor’s fees alone.

 

For instance, a reputable AICPA-certified firm dedicated to SOC 2 audits may charge $20,000 for a SOC 2 Type I audit and $30,000 for a SOC 2 Type II audit. Additionally, they offer a gap assessment service for $15,000.

 

Further expenses may be incurred for SOC 2 remediation services, which vary based on the specific requirements. When considering all these components collectively, the total costs can quickly escalate, potentially reaching six figures.

 

Moreover, various other associated expenses need to be considered: 

 

1. Preparation costs ($7-15k)

 

Before commencing the audit, organizations must ensure they are ready for the assessment. This entails conducting an internal readiness assessment to identify gaps in controls and security measures. The costs associated with preparing for the audit may vary depending on the organization’s existing control framework and the extent of remediation efforts required.

 

2. New tools/software costs ($5-50k)

 

To enhance their security posture and compliance, some organizations may invest in new tools or software that facilitate SOC 2 compliance. Such tools can help streamline the audit process and improve control efficiency. However, these acquisitions should be factored into the overall cost of SOC 2 compliance.

 

3. SOC 2 consutalt costs ($15-85k)

 

Leveraging the expertise of SOC 2 consultants can be beneficial, especially for organizations new to the audit process. Consultants provide valuable guidance on preparing for the audit, implementing controls, and addressing vulnerabilities. Their professional fees can contribute to the overall SOC 2 compliance costs.

 

4. Legal fees (Varied)

 

In certain cases, organizations may require legal advice to address compliance-related legal matters. This includes reviewing contracts with third-party vendors and ensuring that contractual agreements align with SOC 2 requirements. Legal consultation costs should be considered as part of the compliance expenses.

 

5. Employee training costs (Depends on the number of employees)

 

Comprehensive employee training on SOC 2 compliance is crucial for the successful implementation and maintenance of controls. Organizations may need to invest in training programs to educate employees about their roles in ensuring compliance with SOC 2 principles.

 

6. Audit costs ($5-60k)

 

Beyond the engagement fees charged by the audit firm, additional costs may arise during the audit process. For example, if the audit requires on-site visits to multiple locations, travel and accommodation expenses for auditors may add to the overall cost.

 

Lower SOC 2 audit costs with CyberArrow GRC

 

SOC 2 automation platforms like CyberArrow have proven highly beneficial for companies, resulting in significant cost savings and time efficiencies during the audit process. 

 

With its pre-built templates, security training, and readiness assessments, CyberArrow eliminates the need to engage costly consultants, enabling businesses to direct their financial resources elsewhere.

 

Moreover, leveraging CyberArrow, SOC 2 automation software, leads to increased productivity and further cost savings within your team. By streamlining the compliance process and automating evidence collection for auditors, the entire SOC 2 reporting procedure becomes more efficient, enabling faster completion and reduced expenses associated with extended audit timelines.

 

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