SOC 2 Type 1 vs. SOC 2 Type 2

SOC-2 is an information security framework for service organisations characterised by five Trust Services Criteria compliance controls: security, privacy, confidentiality, availability, and processing integrity. However, not all controls are relevant to every organisation, and security is the only mandatory control set.

As part of successfully achieving SOC-2, your organisation must undergo an external audit run independently by a Certified Public Accountant (CPA) before receiving a final client report.

There are two types of SOC-2 reports: Type 1 and Type 2. When comparing the SOC-2 Type 1 report vs. the SOC-2 Type 2 report, it’s important to know which is right for your business.

In this article, Hicomply discusses the two different SOC-2 report types.

What is a SOC-2 Type 1 report?

A SOC-2 Type 1 report assesses an organisation’s security process design and the suitability of its controls at a specific point in time. In this report, the auditor reviews the systems and controls the organisation currently has and the documentation surrounding those systems and controls.

What is a SOC-2 Type 2 report?

A SOC-2 Type 2 report, often written as Type II, assesses your organisation’s design of security processes and controls over a longer period, usually around six months. The longer period means the external auditor can assess the design and suitability of your controls – and their operating effectiveness.

SOC-2 Type 1 reports are a snapshot of an organisation’s SOC-2 preparedness. SOC-2 Type 2 reports detail the design of controls and their ongoing effectiveness, meaning organisations that gain an unmodified opinion (which is essentially a ‘pass!’) in a SOC-2 Type 2 report can showcase their commitment to data security to customers and prospective customers.

SOC-2 Type 1 vs SOC-2 Type 2: Which is right for my business?

SOC-2 Type 1 vs SOC-2 Type 2 reports can serve quite different purposes for an organisation. The main differences are outlined below:

SOC-2 Type 1 vs SOC-2 Type 2: Strength

A SOC-2 Type 1 report indicates that your organisation has best practices. It’s solid proof that your organisation has implemented the necessary controls for data security. However, the auditor will not be able to verify how your controls will hold up in the long term when a SOC-2 Type 1 report is conducted. This report will, however, provide stronger security stature and offer confidence to your stakeholders that your controls will still be effective thanks to consistent monitoring and testing.

Comparatively, a SOC-2 Type 2 report delves deeper, evidencing your organisation’s controls and their effectiveness for your customers (and potential customers) to see. It’s assurance that your organisation has processes and controls to keep data secure, just like SOC-2 Type 1, and that your business applies these controls effectively. Your auditor will give their opinion on the suitability of design, implementation of controls, and overall operating effectiveness.

It’s the proof in the pudding. Not only does your organisation have the necessary controls– they are also effective at protecting sensitive data.

SOC-2 Type 1 vs SOC-2 Type 2: Speed

For some companies still in their initial stages, not having a SOC-2 report can block sales deals, especially as more and more stakeholders and third-party accounts prioritise security compliance. Under these circumstances, if you need a SOC-2 report quickly, the SOC-2 Type 1 report is the best option due to its short audit timeline.

However, if your business doesn’t need to achieve SOC-2 compliance urgently, it’s worth skipping SOC-2 Type 1 and going straight to SOC-2 Type 2, as prospective customers and clients frequently accept this. Your business may also begin with the SOC-2 Type 1 audit to receive the report quickly and later progress to a SOC-2 Type 2 to display a higher level of security compliance.

Your business determines the SOC-2 Type 2 report timeline, with the options being three, six, nine, or twelve months. Your security posture will be stronger if you choose the longer audit windows. However, many organisations start at the three-month minimum and then progress to longer audit windows as the business grows.

To summarise, if the SOC-2 Type 1 report is the support act at a concert, giving fans a sense of what the overall experience will be like, the SOC-2 Type 2 report is the headline act – which is why many organisations work towards SOC-2 Type 2 success.

An unmodified opinion from an independent auditor, backed by a report stating what the organisation is doing to protect sensitive data, can help organisations appeal to prospective customers and be considered in new business tenders. This offers your business a huge competitive advantage.

Achieving SOC-2 Type 2 With Hicomply

With Hicomply, you will be audit-ready for SOC-2, ensuring your organisation will be considered in key tenders and building trust with your existing customers and third-party suppliers. The Hicomply SOC-2 automated framework will guide you through the process of:

• Scoping your organisation

• Identifying core focus areas from the five Trust Services Criteria, including the mandatory Security controls

• Building out your controls using Hicomply’s existing templates

• Undertaking risk assessments and treating identified risks within the Hicomply platform

• Identifying how a risk impacts your organisation’s security objectives and if the risk poses any fraud risk as well as a security risk

• Automatically generating policies and procedures – again, from our templates!

With the automation options within the Hicomply platform, you can reduce the time to achieve an unmodified opinion in your SOC-2 Type 2 report by 50%, reducing your business's costs overall.

Ready to secure your data and win more business? Get in touch to achieve compliance as you work!