Glossary

SOC 2

An auditing procedure developed by the AICPA that ensures a service organization securely manages data to protect the interests and privacy of its clients, a common requirement for healthcare SaaS vendors.

Get in touch Learn more

Data scientist building training data pipeline on laptop, data preprocessing visible, technical workspace.

TRUST SERVICES CRITERIA

What is SOC 2?

SOC 2 is an auditing procedure developed by the American Institute of CPAs that evaluates a service organization's controls relevant to security, availability, processing integrity, confidentiality, and privacy.

SOC 2 is a voluntary compliance standard for service organizations, developed by the American Institute of CPAs (AICPA), that specifies how companies should manage customer data. The standard is based on five Trust Services Criteria: security, availability, processing integrity, confidentiality, and privacy. A SOC 2 report, issued by an independent auditor, attests that a SaaS vendor has implemented the necessary controls to meet these criteria.

For healthcare AI vendors, a SOC 2 Type II report is often a prerequisite for enterprise contracts, as it demonstrates operational effectiveness over a sustained period—typically 6 to 12 months. Unlike a Type I report, which assesses control design at a single point in time, a Type II audit validates that controls like encryption, access management, and continuous monitoring function reliably, complementing HIPAA compliance and HITRUST certification in a comprehensive security posture.

SOC 2 FRAMEWORK

The Five Trust Services Criteria

The SOC 2 framework, developed by the AICPA, is structured around five foundational principles known as the Trust Services Criteria. These criteria provide a comprehensive blueprint for evaluating the security, availability, processing integrity, confidentiality, and privacy of a service organization's systems and data.

Security

Information and systems are protected against unauthorized access, unauthorized disclosure of information, and damage to systems that could compromise the availability, integrity, confidentiality, and privacy of information or systems.

Core Components: Firewalls, intrusion detection, multi-factor authentication (MFA), and strict access controls.
Objective: This is the foundational criterion, often referred to as the 'common criteria,' and is mandatory for every SOC 2 audit. It ensures the system is fortified against logical and physical threats.

Availability

Information and systems are available for operation and use to meet the entity's objectives.

Core Components: Performance monitoring, disaster recovery protocols, and incident handling.
Objective: This criterion assesses whether a system is accessible for use as stipulated by a contract or service level agreement (SLA). It does not address system functionality, only its operational accessibility.

Processing Integrity

System processing is complete, valid, accurate, timely, and authorized to meet the entity's objectives.

Core Components: Quality assurance procedures, data validation checks, and process monitoring.
Objective: This criterion verifies that data processing is error-free and functions as intended. It focuses on whether the system achieves its purpose without delay, omission, or accidental manipulation, ensuring data inputs map correctly to outputs.

Confidentiality

Information designated as confidential is protected to meet the entity's objectives.

Core Components: Encryption at rest and in transit, access controls, and secure disposal of data.
Objective: This criterion applies to all types of confidential information, including business plans, intellectual property, and customer data. It ensures that sensitive data is accessible only to a defined set of persons or organizations.

Privacy

Personal information is collected, used, retained, disclosed, and disposed of in conformity with the commitments in the entity's privacy notice and with criteria set forth in Generally Accepted Privacy Principles (GAPP).

Core Components: Data minimization, consent management, and data subject access rights.
Objective: This criterion specifically addresses the handling of personal information (PII) in line with the organization's stated privacy policy. It is distinct from confidentiality, as it deals with the rights of the individual to whom the data relates.

AUDIT COMPARISON

SOC 2 Type I vs. Type II

Key differences between the point-in-time suitability assessment and the sustained operational effectiveness audit under the AICPA Trust Services Criteria.

Feature	SOC 2 Type I	SOC 2 Type II
Audit Focus	Suitability of control design at a specific date	Operating effectiveness of controls over a period of time
Observation Window	Point-in-time (single date)	Minimum 6-month review period
Tests Control Operation
Evaluates Control Design
Typical Duration	2-4 weeks	3-6 months
Evidence Collected	System description and control walkthroughs	Operational logs, access reviews, incident records, and configuration audits
Assurance Level	Moderate	High
Regulatory Acceptance	Often insufficient for enterprise vendor due diligence	Required by most healthcare enterprise procurement teams

SOC 2 COMPLIANCE

Frequently Asked Questions

Clear, technically precise answers to the most common questions about SOC 2 audits, their role in healthcare SaaS, and how they intersect with HIPAA compliance.

A SOC 2 (System and Organization Controls 2) report is an independent attestation audit developed by the American Institute of Certified Public Accountants (AICPA) that evaluates a service organization's controls relevant to security, availability, processing integrity, confidentiality, and privacy—the five Trust Services Criteria. Unlike a prescriptive checklist, SOC 2 is a flexible framework: an organization defines its own control objectives based on the services it delivers, and a licensed CPA firm audits whether those controls are suitably designed and operating effectively over a defined period. The audit results in one of two report types: a Type I report, which assesses the design of controls at a specific point in time, or a Type II report, which evaluates the operational effectiveness of those controls over a minimum six-month observation window. For a healthcare SaaS vendor handling clinical data, the Type II report is the gold standard, providing evidence that security controls—such as access management, encryption, and change management—are not merely documented but consistently enforced in production.

Enabling Efficiency, Speed & Accuracy

Intelligent Analysis, Decision & Execution

We build AI systems for teams that need search across company data, workflow automation across tools, or AI features inside products and internal software.

Talk to Us

Search across company data

Give teams answers from docs, tickets, runbooks, and product data with sources and permissions.

Useful when people spend too long searching or get different answers from different systems.

Enterprise searchRAGPermissions

Automate internal workflows

Use AI to route work, draft outputs, trigger actions, and keep approvals and logs in place.

Useful when repetitive work moves across multiple tools and teams.

AI agentsWorkflow automationGovernance

Add AI to products and internal tools

Build assistants, guided actions, or decision support into the software your team or customers already use.

Useful when AI needs to be part of the product, not a separate tool.

AI integrationDecision supportModel routing

SOC 2 ECOSYSTEM

Related Terms

SOC 2 compliance intersects with multiple security, privacy, and operational frameworks. These related concepts form the foundation of a comprehensive trust posture for healthcare SaaS vendors.

HIPAA Security Rule

A federal regulation establishing national standards to protect electronic protected health information (ePHI). While SOC 2 evaluates controls against trust service criteria, the HIPAA Security Rule mandates specific administrative, physical, and technical safeguards. Healthcare vendors often map their SOC 2 controls to HIPAA requirements, creating a unified compliance program.

Administrative safeguards: Risk analysis, workforce training, incident response
Physical safeguards: Facility access controls, workstation security
Technical safeguards: Access controls, audit controls, transmission security

EXPLORE

HITRUST CSF

A certifiable framework that harmonizes multiple regulations including HIPAA, ISO 27001, PCI DSS, and SOC 2 into a single prescriptive standard. HITRUST CSF provides a maturity-based scoring model rather than a pass/fail audit, making it the preferred certification for healthcare payers and providers.

Integrates SOC 2 trust service criteria with healthcare-specific controls
Requires validated assessment by an external assessor
Maps to 40+ authoritative sources including NIST SP 800-53

EXPLORE

Business Associate Agreement (BAA)

A legally binding contract between a HIPAA-covered entity and a business associate that establishes permitted uses and disclosures of PHI. SOC 2 Type II reports are frequently requested during BAA negotiations as evidence that the vendor has implemented appropriate security controls.

Defines breach notification timelines and responsibilities
Specifies subcontractor management requirements
Requires return or destruction of PHI at contract termination

Audit Trail & Immutable Logs

SOC 2's Security and Availability criteria require comprehensive logging of system activity. Immutable logs—records that cannot be altered or deleted after creation—provide the evidentiary foundation for auditor verification of control effectiveness.

Captures who accessed what data and when
Supports forensic investigation of security incidents
Enables continuous monitoring of control deviations
Often implemented via append-only storage or blockchain-anchored timestamps

Encryption at Rest & in Transit

Cryptographic controls are fundamental to SOC 2's Confidentiality trust service criterion. Encryption at rest protects stored data using algorithms like AES-256, while encryption in transit secures data moving across networks via TLS 1.3. Both are addressable implementation specifications under HIPAA.

At rest: Full-disk encryption, database-level encryption, envelope encryption with cloud KMS
In transit: Mutual TLS for service-to-service communication, HTTPS for client-facing endpoints
Key management must demonstrate separation of duties

Zero Trust Architecture

A security model based on 'never trust, always verify' that aligns with SOC 2's logical and physical access control requirements. Zero trust eliminates implicit trust in network location, requiring continuous authentication and authorization for every access request.

Micro-segmentation limits lateral movement
Just-in-time access reduces standing privileges
Continuous monitoring feeds into SOC 2 control testing
Complements role-based access control (RBAC) for PHI protection

About the author

Prasad Kumkar

CEO & MD, Inference Systems

Prasad Kumkar is the CEO & MD of Inference Systems and writes about AI systems architecture, LLM infrastructure, model serving, evaluation, and production deployment. Over 5+ years, he has worked across computer vision models, L5 autonomous vehicle systems, and LLM research, with a focus on taking complex AI ideas into real-world engineering systems.

His work and writing cover AI systems, large language models, AI agents, multimodal systems, autonomous systems, inference optimization, RAG, evaluation, and production AI engineering.

Limited slotsGet a Free AI Consultation

How We Work

Custom AI workflows for your Business

One-fit-all AI don't work for modern businesses. At Inferensys, we aim to understand your business & custom requirements; which we use to define most efficient agentic workflows, the data, and the tools for your business.