SOC 2 Reports: What Really Matters and Where

Think your vendors are secure just because they say so? That's where SOC 2 reports come in. SOC 2 (System and Organization Controls 2) reports are independent audits that evaluate how well a service provider protects customer data based on trust principles like security, availability, and confidentiality. Especially common among cloud providers and SaaS vendors, these reports help separate marketing claims from actual, audited safeguards.

If you've ever been handed a SOC 2 Type 2 report and didn't know where to begin, trust me, you're not alone. The KPMG Controls Assurance Benchmarking Report 2024 notes a 23% increase in SOC 2 reports issued in 2023 compared to the prior year, reflecting a rising trend in organizations seeking SOC 2 compliance. That uptick clearly shows how much pressure vendors face to prove their compliance.

Yet despite that momentum, many IT leaders still feel overwhelmed when reading their first SOC 2 report. These documents are critical for evaluating a vendor's commitment to data security, but they can feel more like tax documents than risk assessments. I've been there—late nights, tight deadlines, and one cloud partner that almost slipped through the cracks.

This guide captures those lessons and distills them into a practical checklist you can actually use.

Start with scope, and ask what's really covered

SOC 2 audits are like Russian nesting dolls. There's the high-level scope, how the vendor's environment is structured, and then the Trust Services Criteria (more on that soon). Never assume the report covers everything the vendor provides. I once assumed our cloud backup vendor's SOC 2 covered mobile access; it didn't.

Make sure the system description aligns with the services you use. I always ask vendors for written confirmation. If it's not explicitly covered, it might as well not exist.

Also, SOC 2 reports use AICPA-defined control sets, which often feel disconnected from how we typically talk about security. A report might say, "Password policy in place with no deviations," but that doesn't mean the policy meets your standards, like requiring 12-character minimums or multifactor authentication. I keep a personal checklist of critical controls and cross-reference them with each report.

Understand the trust services criteria

SOC 2 reports evaluate several "pillars" of trust. Most reports include:

• Security: Covers access controls, risk assessments, and change management. It's the baseline.

• Confidentiality and availability: Great if you care about data retention or system uptime.

• Processing integrity: Essential if the vendor processes data where errors might go unnoticed, like billing.

• Privacy: Often omitted unless required by regulation. If privacy is important, conduct your own review.

The auditor matters more than you think

Not all auditors are created equal. I once worked with a vendor whose SOC 2 looked strong, until I checked their auditor's credentials. They hadn't passed an AICPA peer review in years.

A quick search on the AICPA portal will tell you if an auditor passed their review. Look for a "Pass" and a recent date. If your vendor works with sensitive data or bleeding-edge technology like AI, make sure the auditor understands the space.

Mind the audit period

Who's really doing the work? Check subservice providers 

Vendors often rely on other vendors, subservice providers. Think AWS or Azure. If those providers aren't included in the SOC 2 review, you're taking on their risk indirectly.

• Inclusive reports include the sub-vendor in the review.

• Carve-out reports exclude them, which means you'll need to do more due diligence.

I've seen carve-outs where sub-vendors handled critical infrastructure but weren't reviewed. That's a red flag.

Auditors vary in how they evaluate controls. Some conduct interviews, others pull data samples, while some only review documents. I look for specifics, like whether they reviewed all terminated employees or just a few. The more detailed the process, the more confidence I have.

Also check the auditor's opinion. If it's not a clean "everything's in order," dig into the details. Sometimes gaps are hidden behind vague language like, "Incident response not reviewed due to no incidents."

Even solid reports can have gaps. For example, user access reviews often reveal weak points. What matters is how quickly the vendor fixed the issue and whether it's a recurring pattern. We once flagged a vendor with repeated access control issues across multiple audits. That's not a one-off, that's a systemic issue.

Vendors can respond to audit findings. This is their opportunity to explain what happened and how they're addressing it. I always read this section closely. Vague responses like "plans TBD" are red flags. Good responses are clear, specific, and show accountability. 

Just because you're using a cloud app doesn't mean everything is secure by default. Vendors often list what you need to do, like using strong passwords or updating default configurations.

The Snowflake breach in 2024 happened partly because customers failed to change weak default settings. That's why I always ask: "What's my role in keeping this secure?”

Given how long and complicated SOC 2 documents can be, GenAI can be a powerful tool in making this process easier and more effective. Using an enterprise-grade personal GPT—one that won't train on your data or make it public—can help you summarize what a SOC 2 report covers and pinpoint specific risks based on your business use case.

Whether it's quickly identifying gaps, mapping controls to your requirements, or extracting key findings, this kind of AI assistance can save hours and reduce errors. That said, it's always wise to cross check AI-generated summaries and insights with the actual report, just to ensure the model hasn't hallucinated or introduced findings that weren't there to begin with.

No SOC 2 report will give you absolute certainty. It's a tool, not a guarantee. What matters is how well you understand the risks and whether those risks are acceptable. For example, Twilio was SOC 2 Type II certified in 2022, but attackers still used SMS phishing to trick employees into handing over credentials resulting in unauthorized access to internal systems and customer data. The key takeaway: even strong internal controls can be bypassed through social engineering. Can you live with the risks? Can you reduce or transfer them?

Sometimes I ask vendors to improve something. Other times, I document the risk and add extra monitoring on our side.

At the end of the day, reviewing SOC 2 Type 2 reports isn't about checking boxes. It's about understanding your partners and knowing how much you can trust them. Don't aim for perfection, aim for clarity. A broad, honest view of your vendor ecosystem will serve you far better than scrutinizing just a few and missing what really matters.