What Happens if I Fail a SOC 2 Audit?

When your small business is asked to provide SOC 2 attestation, it's easy to panic. The moment you start thinking about the time, effort, and resources—both personnel and money—that need to go into preparing for the audit, it's natural to worry about the possibility of failure. After all, the last thing you want is for all that hard work to go to waste.  

Can my startup fail a SOC 2 audit and what would happen next?” Let’s break it down.  

• Can you Fail a SOC 2 Audit? 

• Can I Guarantee SOC 2 Compliance for My Small Business? 

• How Long Does it Take Startups to Achieve SOC 2? 

• Final Thoughts on SOC 2 Audits for Small Business 

Can you Fail a SOC 2 Audit? 

The good news is, technically, you don’t “fail” a SOC 2 audit. Auditors issue opinions on your small business compliance with SOC 2 controls, but the outcome isn't a binary pass/fail. There are varying degrees of success based on how your small business performs against the criteria. 

Here are the possible outcomes: 

1. Unqualified Opinion (Clean Report): This is the best-case scenario. The auditor found no issues in your controls, and you're fully compliant. Your small business is operating effectively and securely, according to SOC 2 standards.
2. Qualified Opinion: This is a mixed result, meaning the auditor found some areas of concern, but the overall controls are generally sound. Specific issues will be identified, and while this isn't an outright failure, it does require you to address the deficiencies before you can fully claim compliance.
3. Adverse Opinion: In this case, the auditor found significant issues with your controls, and you are not in compliance with SOC 2 requirements. This would require substantial remediation efforts to correct the problems before a clean opinion can be issued.
4. Disclaimer of Opinion: If the auditor is unable to gather sufficient evidence to form an opinion, this result will be issued. This typically means the audit was incomplete, often due to poor documentation or lack of necessary data. 

So, while your startup can’t “fail” a SOC 2 audit outright, a less-than-ideal report can still have serious implications, including potential harm to your reputation and disruptions to your business operations. But remember, these opinions are not final—they provide you with actionable feedback to improve your security posture and eventually reach compliance. 

Can I Guarantee SOC 2 Compliance for My Small Business?  

While no one can 100% guarantee a clean SOC 2 audit, compliance automation tools are our best advice to making the process much smoother. One of the major benefits of working with automated compliance solutions for startups is that they help you prepare and collect the right evidence in real time. 

Drata, for example, works hand-in-hand with auditors, vetting the evidence-gathering process from the start. This collaboration ensures that what’s being collected is audit-ready from day one. So, when the time comes for your audit, the auditor receives just what they need—reliable, verified data. This vetting process makes the entire audit more predictable and efficient. 

Your evidence is continuously updated, and it’s clear to the auditors that the data they’re reviewing is accurate and relevant. This cuts down on audit preparation time and helps ensure that when you hand over your audit materials, you’re confident in what’s being presented. 

While this doesn’t provide a 100% guarantee, it’s as close as you can get in the unpredictable world of audits. 

How Long Does it Take Startups to Achieve SOC 2? 

One of the most common concerns businesses have when preparing for a SOC 2 audit is the time commitment because you need the fastest way to get compliant. On average, achieving SOC 2 compliance without automation can take anywhere from 6 months to over a year.  

This timeline includes gathering the necessary documentation, implementing required controls, and performing internal reviews before the actual audit takes place. For startups juggling multiple responsibilities, this extended timeline can be a major burden. 

However, compliance automation platforms significantly reduce this timeline. When using these solutions, it’s common to see the process take as little as 3 to 6 months.  

This is because automation streamlines many of the tedious tasks involved in preparing for a SOC 2 audit, such as collecting and organizing evidence, continuously monitoring controls, and flagging issues in real time.  

Instead of spending months preparing, you can focus on running your business while your compliance tool takes care of the heavy lifting. 

Final Thoughts on SOC 2 Audits for Small Business 

While the prospect of failing a SOC 2 audit can be intimidating, the truth is, failure isn’t as black-and-white as it seems. The audit results provide you with invaluable insights into where your small business stands, allowing you to improve your security and compliance processes.  

With the help of managed compliance for small business, and compliance automation tools the entire audit process stops being a headache.

By automating the more challenging aspects of compliance, you reduce the likelihood of receiving adverse or qualified opinions, and speed up your path to achieving SOC 2 compliance, allowing you to take your startup to the next level.