Encryption is the process of converting readable data (plaintext) into protected data (ciphertext) so that only authorized parties with the correct cryptographic keys can make it readable again.
In security and compliance programs, encryption is one of the most common technical controls used to protect confidentiality. It does not replace access control, but it reduces the impact of unauthorized access to disks, backups, network traffic, or exported files.
In simple terms, encryption answers:
- If someone obtains the stored bytes, can they read the data?
- If traffic is intercepted in transit, can they read the contents?
Auditors often ask how sensitive data is protected at rest and in transit, how keys are managed, and what audit evidence shows those protections were in place during the audit period.
Why Encryption Matters
Most organizations store customer data, credentials, secrets, or business records in cloud services and SaaS tools. Encryption helps protect that information when systems are misconfigured, devices are lost, backups are copied, or network paths are exposed.
Encryption matters for compliance because:
- Confidentiality expectations often include protecting data at rest and in transit.
- Security questionnaires frequently ask whether databases, object storage, laptops, and APIs use encryption.
- Key management weaknesses can undermine otherwise strong encryption settings.
- Type 2 audits typically look for evidence over time, not only a one-day configuration screenshot.
Encryption is a control technique. Like other controls, it needs ownership, monitoring for drift, and evidence that settings remained effective.
Encryption at Rest vs Encryption in Transit
These two phrases appear constantly in SOC 2 discussions and customer reviews.
| Type | What it protects | Common examples | Typical evidence themes |
|---|---|---|---|
| Encryption at rest | Data stored on disk, in databases, object storage, backups, or endpoints | Volume encryption, database encryption, encrypted S3/object buckets, encrypted laptop disks | Configuration settings, provider attestations/settings exports, backup encryption flags, MDM disk encryption reports |
| Encryption in transit | Data moving between systems over a network | TLS for HTTPS APIs, encrypted database connections, VPN or secure admin channels | TLS configuration, certificate inventory, scanner results, architecture diagrams showing TLS paths |
Both matter. Encrypting a database while allowing cleartext traffic on an internal path, or forcing HTTPS while leaving unencrypted backups, leaves gaps auditors and attackers can still exploit.
Keys and KMS at a High Level
Encryption is only as strong as the way keys are created, stored, rotated, and accessed.
Cryptographic keys are the secret values used to encrypt and decrypt data (or to wrap other keys). If an attacker obtains both the ciphertext and the usable key material under weak access controls, encryption may not help.
Key Management Service (KMS) usually refers to a managed service or system that generates, stores, and controls use of keys. Cloud KMS offerings commonly support separation of duties, access policies, audit logs for key use, and rotation features. Exact capabilities differ by provider.
Practical expectations teams often adopt:
- Prefer managed KMS or HSM-backed options for production master keys when available.
- Restrict who can create, rotate, disable, or use keys.
- Separate human access to data from broad ability to export key material whenever possible.
- Log administrative key events and review unusual access.
- Document rotation and destruction practices for in-scope systems.
This page does not prescribe a single algorithm or product. Algorithm choices, cipher suites, and key lengths should follow current guidance from your security team and any frameworks you adopt.
How Encryption Supports Confidentiality
Confidentiality is about limiting access to sensitive information to authorized people and systems. Encryption supports confidentiality by making stolen or exposed data difficult to use without keys.
Encryption does not automatically solve:
- Over-permissioned application users who can decrypt through the normal product path
- Secrets hard-coded in repositories
- Mis-sent data through approved channels
- Weak identity controls around the systems that hold keys
That is why encryption and access control work together. Access policies decide who may use the decrypted view. Encryption protects the underlying bytes when storage or transport is exposed.
Encryption Examples
| Control area | Example control | Example evidence |
|---|---|---|
| Cloud storage | Object storage buckets use server-side encryption | Bucket encryption configuration export, IaC policy checks, change tickets |
| Databases | Production databases encrypt data at rest | Database parameter/settings screenshot or API export, provider console report |
| Application traffic | Public APIs require TLS | TLS scanner output, load balancer listener config, certificate validity records |
| Endpoints | Company laptops enforce disk encryption | MDM compliance report showing FileVault/BitLocker status by device |
| Backups | Backup sets are encrypted and access-restricted | Backup job settings, restore access list, key policy references |
| Secrets | Application secrets are stored in a secrets manager, not plaintext config | Secrets manager policy, repository scan results, exception tickets |
Common systems that appear in evidence packages include AWS (storage/KMS settings), GitHub (repo scanning and IaC history), Jira (exception or remediation tickets), Okta (admin access to security tools), and Google Workspace (device or policy reports). Use them as context for where evidence often lives, not as a claim about any specific AuditFlo integration set.
Framework Notes
SOC 2
SOC 2 Security and Confidentiality discussions commonly include encryption of sensitive data at rest and in transit, plus related key management and access topics. Auditors may request configuration evidence, policies, and samples across the audit period when those controls are in scope. For broader evidence patterns, see What Is SOC 2 Evidence? and SOC 2 Type 1 vs Type 2.
Treat auditor requests as scoped to your system description and control set. There is no single universal SOC 2 artifact list that every company must produce.
ISO 27001 and related practice
ISO 27001 programs often address cryptographic controls and key management as part of protecting information assets. Assessors typically look for policy direction, selected cryptographic measures based on risk, and operating evidence. Exact requirements depend on your risk assessment and Statement of Applicability.
Other programs
PCI DSS, HIPAA, and NIST-oriented programs also emphasize encryption or equivalent compensating protections for certain data types and channels. Map controls carefully rather than assuming one evidence package satisfies every framework.
Evidence Auditors May Request
The following are common examples of artifacts teams prepare. They are illustrative, not a mandatory checklist for every audit:
- Data classification rules that identify what must be encrypted
- Encryption policy or standards (algorithms, at-rest/in-transit expectations, key handling)
- Cloud or database encryption configuration exports
- TLS configuration and certificate management records
- KMS key policies, rotation records, and administrative access reviews
- Endpoint disk encryption compliance reports
- Backup encryption settings and access restrictions
- Tickets showing remediation when encryption was found disabled or misconfigured
- Architecture diagrams noting encrypted paths and trust boundaries
Evidence quality improves when records include dates, system identifiers, owners, and a clear link to the control being tested. Collection guidance is covered in audit evidence collection.
Common Encryption Failures
Watch for these recurring issues:
- Encryption enabled in one environment (production) but missing in staging systems that hold sensitive copies
- TLS terminated in a way that leaves sensitive hops unencrypted without a documented risk decision
- Keys stored alongside ciphertext in the same weakly protected location
- Broad admin roles that can both read data and manage keys with little oversight
- No monitoring for configuration control drift, such as a new bucket created without encryption defaults
- Policies that mandate encryption without operational proof across the audit period
- Assuming provider defaults are always sufficient without verifying settings for in-scope resources
- Treating encryption as a substitute for least-privilege access control
Continuous Compliance Bridge
Encryption settings change when teams create new cloud resources, rotate certificates, open network paths, or revise backup tooling. Continuous compliance means catching those changes early and keeping configuration evidence current, rather than discovering gaps during SOC 2 audit preparation.
Ongoing readiness themes are also covered in AuditFlo's continuous compliance resource.
How AuditFlo Helps
AuditFlo (auditflo.co) helps teams collect and organize evidence of encryption-related policies, configurations, reviews, and remediation over the audit period.
The focus is continuous evidence collection and audit-period history: mapping artifacts to controls, preserving dates and ownership, and reducing last-minute screenshots across common systems such as GitHub, Jira, Okta, AWS, and Google Workspace. AuditFlo is not positioned here as a cryptography product. It helps you prove the encryption and key-management controls your security program already defines.
To see the workflow for your stack, request a demo.
Key Takeaway
Encryption turns readable data into ciphertext so unauthorized parties cannot easily use it without keys. For compliance, teams usually need both encryption at rest and encryption in transit, plus disciplined key management and dated evidence that settings remained in place. Pair encryption with strong access control, watch for configuration drift, and keep proof ready across the audit period.