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How Background Checks Help Achieve SOC 2 Compliance

Think SOC 2 is a boring compliance topic? Think again. If you’re a SaaS startup, this designation gives you a competitive edge. Background checks are a key enabler of SOC compliance because they help you meet the security controls needed to earn a clean report.

What Is SOC 2 Compliance?

The System and Organization Control (SOC) certification program is a voluntary compliance standard developed by the American Institute of Certified Public Accountants (AICPA).

SOC 2 Diagram of the 5 trust principles of security, privacy, confidentiality, processing integrity, and availability

The auditing framework is rooted in five trust principles: security, privacy, confidentiality, processing integrity, and availability. Because of the enhanced internal controls needed to obtain your clean audit report, this designation confirms your business has stringent processes in place to securely manage its data.

This certification is rapidly becoming one of the top security standards vendors, clients, and customers all look for, so you could be missing out on business without it. This blog post describes more of the different types.

Who’s Required to Be SOC 2 Compliant?

If you’re a service provider or your organization generally stores customers’ data in the cloud, this type of compliance report is applicable to your business.

While not mandatory, for many companies a clean report is a key requirement when considering which third-party vendor to hire. The contractual commitments in your service level agreements may indicate which controls you should put in place or should look for in others.

New services with outsourcing arrangements that drive adoption include:

  • Software as a service (SaaS)
  • Infrastructure as a service (IaaS)
  • Platform as a service (PaaS)
  • Cloud providers

 

At Certn, we can assist you with designing a background check program that can help you satisfy the background check requirements needed to earn your SOC 2 certification.

Benefits of SOC 2

Demonstrating this kind of commitment to information security has obvious benefits for any company that stores its data in the cloud because mishandled data can leave businesses vulnerable. More than that, it helps a brand stand out as a privacy leader.

It signals to clients and customers that your business processes consistently exceed regulatory requirements. In fact, some companies, especially in the United States, will only do business with partners and vendors that are certified. For example, for your company to be compliant, all your third-party vendors must be compliant too. Without it, you may lose out on business.

Aside from distinguishing your brand as trustworthy and enhancing your reputation, the security controls protect your business from cyber attacks and data breaches.

The Cost of a Data Breach

As we’ve covered in another compliance blog post, you open yourself up to potential risks when you don’t have the right processes in place to protect your business.

Data breaches are a serious and growing problem for companies of all sizes. According to IBM’s The Cost of a Data Breach Report 2022, 83% of companies will experience a data breach at least once.

Average Cost of Data Breach

The IBM report goes on to add that data breaches cost companies $4.35M on average, and that the industry with the highest average data breach cost is healthcare at $10.10M.

Data Security for Businesses

It’s important for companies of all sizes to invest in security to protect themselves from cyber risk. Data by researchers at the cloud security company Barracuda Networks revealed that small businesses are three times more likely to be targeted by cybercriminals.

Root Causes of Data Breaches

According to 2022 data, these are some of the root causes of data breaches:

  • 19% Stolen or compromised credentials
  • 16% Phishing
  • 15% Cloud misconfiguration
  • 13% Vulnerability in third-party software
  • 9% Physical security compromise, responsible for of breaches
  • 8% Malicious insider

 

To address some of the most common causes of data breaches described above, approaches need to be holistic.

This is why SOC 2 compliance has become the gold standard for data security: Its comprehensive and principle-based approach is designed to meet the individual needs of any company, no matter its size or industry.

SOC 2 Background Check Requirements

Background checks are generally regarded as the best practice for meeting the integrity and ethical values requirement (CC1.1) under the security principle. Why? Background checks demonstrate evidence of a standard screening process and due diligence when hiring new employees. What the requirements don’t cite are the particular requirements of the background check, which means you have the flexibility to adopt whatever process works best for you.

The five trust service criteria (TSC) that make up SOC 2 are: security, privacy, confidentiality, processing integrity, and availability.

Security, which includes things that protect data systems from unauthorized access, is the only TSC that must be included. It’s the baseline with nine common criteria you must develop controls for, whereas the others can be included at the discretion of your management. You only need to adopt a control if it applies to you.

On top of this, automating as much as possible is a best practice. A background screening service with an open API that’s easy to integrate into your hiring processes and platform provides an added advantage.

SOC 2 Background Check Compliance

Background screening is an important security step to ensure only trustworthy and qualified employees are hired. It's also one of the controls that you need to implement for passing your SOC 2 audit. Background screening ensures due diligence is done for employees who have access to sensitive information and privileged accounts within your organization and reduces the risks of insider threats. Performing background checks allows obtaining evidence of security checks like:

  • Confirming a candidate's identity
  • Checking that they have the experience and qualifications that they claim
  • Ensuring that they’re not a security risk to your company
  • Verifying that they’re legally allowed to work at your company

 

Applicant Information Certn Rating

Identity Verification

Over the last few years, the Society for Human Resource Management (SHRM) has reported on the rise of applicant fraud. In its latest piece, “Once on the job,” it notes, “these individuals can gain access to data and systems, release ransomware, or obtain the credit card information or Social Security numbers of customers or employees.” This reporting corroborates UK background screening provider Credence’s 2019 findings about CV fraud.

Can You Hire Someone With a Criminal Record and Maintain SOC 2 Compliance?

It’s possible to maintain SOC 2 compliance while hiring candidates who have a criminal record. Here’s why: Conducting background checks when hiring is about demonstrating due diligence, not about excluding a specific population from your talent pool.

By conducting background checks, you demonstrate that you have controls in place, are upholding a standard process, and are making informed hiring decisions when bringing on new employees.

When evaluating candidates with a criminal record, you can look for green flags that they’re trustworthy, such as:

  • The amount of time elapsed since the offence;
  • The offence is unrelated to the job;
  • If they’ve done similar work in the past without incident; and/or
  • The nature and gravity of the offence.

 

You can discuss the matter with your legal counsel to align your hiring policies (like a fair chance hiring program) with your established security procedures.

How to Protect Your Business

A compliant cybersecurity program and clean audit gives you a competitive edge. SOC 2 signals to clients and customers that your business processes consistently exceed regulatory requirements, and background screening helps ensure that employees with access to sensitive information and privileged accounts won’t compromise your data or your reputation.

Certn is a SOC 2-certified background check provider that’s trusted by over 10,000 clients. Book a demo today to learn more about how you can work toward achieving this designation.

Legal disclaimer: The information contained in this blog is for general informational purposes only and does not constitute legal advice.

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