All SOC 2 attestations are audits using the American Institute of Certified Public Accountants’ (AICPA’s) System and Organization Controls (SOC) frameworks. Any organization considering SOC compliance must choose between various SOC levels (i.e., SOC 1, SOC 2, and SOC 3) and the Types of SOC audits (i.e., Type 1 or Type 2). Read on to learn what differentiates a SOC 2 Type 1 attestation and SOC 2 Type 2 attestation and which is best for your organization.
SOC 2 Type 1 and Type 2: Differences and Similarities
SOC 2 Type 1 and Type 2 audits, often erroneously referred to as SOC Type I or SOC 2 Type II attestation, are two kinds of assessments conducted by the same providers, on the same organizations, and for the same target audiences. However, they’re not the same thing.
To facilitate a fuller understanding of SOC attestations’ similarities and differences, this blog will provide:
- An overview of all SOC 2 attestations, irrespective of Type
- A closer look at SOC 2 Type 1 Attestation, with an example
- A closer look at SOC 2 Type 2 Attestation, with an example
These elements will position your organization to strategize its SOC 2 compliance—but there are also other considerations, such as the other SOC levels and additional SOC frameworks.
What is SOC 2 Attestation? (Purpose, Criteria)
Organizations seeking a SOC 2 audit or attestation are typically looking for ways to build trust in their operations across current and future clients. In most scenarios, a SOC 2 attestation is not a legal or regulatory requirement—it is not a compliance framework, per se, but a voluntary test to showcase your organization’s commitment to safety and security. In particular, SOC 2 audits utilize AICPA’s Trust Services Criteria (TSC) framework and its Trust Services Principles (TSP):
- Security – Prevention of unauthorized or harmful uses and disclosures of data
- Availability – Accessibility of user-facing systems and information at all times
- Process Integrity – Completeness, timeliness, and authorization of all processes
- Confidentiality – Protection against breaches of legally protected information
- Privacy – Protection against breaches of personally identifiable information
A SOC 2 attestation is a report on an organization’s ability to ensure some combination of these principles to its clients. It may focus on all five or a selection thereof. The TSC also contains various Criteria attributed to all TSP (i.e., Common Criteria – CC Series) and Supplemental Criteria specific to individual TSP (i.e., A Series, PI Series, C Series, and P Series). Regardless of Type, a SOC 2 attestation is generated for a specialized audience (auditors, B2B clients, etc.).
SOC 2 Type 1 Attestation: Design of Controls
A SOC 2 Type 1 Attestation is a report on management’s description of a service organization’s security program and the suitability of its various controls to the organization’s objectives. This differs from many other cybersecurity and regulatory frameworks in the “suitability factor”; rather than measuring controls strictly against a set of objective metrics, nearly all TSC criteria include language connecting them directly to the organization’s self-defined objectives.
In practice, a Type 1 SOC 2 attestation is a relatively unobtrusive and accessible assessment; it involves a CPA or other service provider examining the security system’s projected or actual implementation at a given point in time. There is no assessment of if or how well controls function over time—just whether they are (or are supposed to be) installed, and if that installation is likely to meet the organization’s objectives, granted full functionality.
SOC 2 Type 1 Audit Example: Small Tech Startup
Consider the situation of a hypothetical client for a SOC 2 Type 1 attestation: a new, small tech startup dedicated to providing insights on consumer trends based on social media. Its business model involves proprietary data analysis of strictly publicly available user data, scraped from Twitter, Instagram, and Amazon reviews. It’s seeking SOC 2 attestation to prove its worth to investors, and it needs results sooner rather than later for a significant investment push this quarter.
This company might opt for a shorter-term SOC 2 Type 1 attestation, focusing specifically on Common Criteria (i.e., CC Series 1 – 9) and the Supplemental Criteria for Availability and Process integrity. It doesn’t need Confidentiality or Privacy safeguards since the data it processes is categorically publicly available. The assessment team would thus bypass all P Series and C Series criteria while assessing control design. This could potentially lead to lower overall bandwidth and cost demands.
SOC 2 Type 2 Attestation: Controls in Practice
A SOC 2 Type 2 attestation is far more involved and high-stakes than its Type 1 counterpart. It involves an in-depth, longitudinal study of how well an organization’s security program functions over an extended period. Rather than just studying how well it ought to meet the organization’s objectives, it examines how well the security program actually meets those objectives—consistently and in real-time.
In practice, SOC 2 Type 2 attestations provide much deeper insights into an organization’s security practices. These, in turn, provide a greater level of trust and assurance for intended readers.
However, a SOC 2 Type 2 attestation resultantly takes significantly longer to accomplish, so it is common for organizations to begin with a SOC 2 Type 1 audit en route to a fuller SOC 2 Type 2 Report. Additionally, an initial SOC 2 readiness assessment can facilitate the entire process.
SOC 2 Type 2 Audit Example: Growing SaaS Firm
Now, consider the situation of a hypothetical organization seeking SOC 2 Type 2 attestation: a larger Software as a Service (SaaS) firm on a steady growth path, seeking expansion into new industries (e.g., healthcare and military contracting). This firm knows its potential clients have strict data protection regulations that will be foisted upon it, so it wants to assure them of its security program functionality.
Unlike the example above, confidentiality and privacy come into play:
- Confidentiality – Working with military contractors may involve processing protected forms of information, such as controlled unclassified information (CUI). This requires compliance with various DoD-specific frameworks (e.g., DFARS, NIST, CMMC). A SOC 2 Type 2 attestation can showcase the SaaS firm’s commitment to protecting the CUI.
- Privacy – Working with clients in healthcare will likely entail processing protected health information (PHI), which is subject to confidentiality Concerns alongside Privacy ones because PHI is, by definition, personal or personally identifiable information protected by HIPAA. While HIPAA compliance is not contingent upon an audit, a SOC 2 Type 2 audit can assure the SaaS firm’s healthcare clients that it will maintain HIPAA compliance.
The deeper insights of a SOC 2 Type 2 attestation (compared to a Type 1) allow for greater visibility and efficiency for controls that must be mapped across various regulations.
Other SOC Audits and Attestations to Consider
AICPA publishes a variety of assessment frameworks and supporting documentation, including other SOC audits under the System and Organization Controls suite. SOC 2 is one of three primary varieties of SOC audits. The others target different organizations and readers:
- SOC 1 – A report on internal controls of financial reporting for a specialized audience
- SOC 3 – A report on the TSC, like SOC 2, but optimized for a general/public audience
Both SOC 1 and 2 can be Type 1 or Type 2; SOC 3 has no type but is long-term, like Type 2.
AICPA also publishes SOC audits targeting specific aims or organizations, entity-wide:
- SOC for Cybersecurity – A description of an entity’s overall cybersecurity program
- SOC for Supply Chain – A description of an entity’s controls impacting production
These assessments are far less structured than SOC 1, SOC 2, or SOC 3 audits. They may use any cybersecurity framework as the baseline rather than being limited to their respective criteria guides or the TSC. They are less standardized than the primary varieties but may serve as an introductory or preparatory implementation for later, fuller SOC 1, SOC 2, or SOC 3 audits.
For most service organizations, SOC 2 Type 2 is the optimal attestation.
Streamline Your SOC 2 Type 1 and Type 2 Reports
Most service organizations seeking SOC compliance will generate a SOC 2 or SOC 3 report—or, in some cases, both. Likewise, when conducting a SOC 2 attestation, the choice is between the shorter and less robust SOC 2 Type 1 and the longer, comprehensive SOC 2 Type 2. As with SOIC 2 and SOC 3, many organizations opt to conduct both a Type 1 and a Type 2 report—or generate the Type 1 report en route to a Type 2.
Whichever route to SOC 2 compliance is best for you, contact RSI Security today for a streamlined audit process.