Who Needs SOC 2 Compliance?

If you’re unsure whether SOC 2 compliance is necessary for your organization, ask yourself the following:

• Industry requirements: Which industries and niches specifically require SOC 2 compliance?
• Report types: Which type of SOC 2 report, Type I or Type II, best fits your needs?
• SOC framework differences: How does SOC 2 differ from SOC 1 and SOC 3?

Other Compliance frameworks: Are there other SOC or security frameworks that might apply to your organization?

Which Industries or Niches Require SOC 2 Compliance?

The SOC (System and Organization Controls) frameworks are a set of standards maintained by the American Institute of Certified Public Accountants (AICPA). There are three main SOC frameworks: SOC 1, SOC 2, and SOC 3. Of these, SOC 2 compliance is specifically relevant to service organizations, typically B2B companies in niches such as:

• Information Technology (IT)
• Cybersecurity and cyber defense
• Consulting services
• Software-as-a-Service (SaaS)
  

Unlike some regulations, SOC 2 is not legally mandated. For comparison:

• Healthcare: HIPAA legally applies to covered entities and their business associates.
• Payment processing: Companies handling credit card data must follow PCI DSS or risk losing the ability to process payments.
  

SOC 2 is client-driven, your clients may require it to trust your services. While not legally required, obtaining a SOC 2 report can strengthen client relationships and help win contracts.

 

Assess your SOC 2 compliance

Which Type of SOC 2 Report Is Right for Your Organization?

Determining who needs a SOC 2 compliance report isn’t always straightforward. Service organizations can produce two types of SOC 2 reports, each serving different purposes:

• Type 1: Evaluates the design of an organization’s controls at a specific point in time. It focuses on the Trust Services Criteria (TSC) for Security, Availability, Processing Integrity, Confidentiality, and Privacy. Type 1 audits typically take up to six months.
• Type 2: Examines the effectiveness of controls over time, based on the same TSC. Type 2 audits ensure that controls are not only well-designed but function as intended, generally over a period of at least six months.
  

Both types follow the same Trust Services Criteria, but while Type 1 measures control design, Type 2 measures controls in action.

Choosing the right report:

• Organizations seeking the highest level of assurance for clients and stakeholders usually pursue a SOC 2 Type 2 report.
  

Organizations with short-term or interim needs may start with a SOC 2 Type 1 report, particularly given the longer time and higher costs associated with Type 2 audits.

Who Should Consider SOC 1 or SOC 3 Instead of SOC 2 Compliance?

When evaluating SOC 2 compliance, it helps to understand which organizations might need a different SOC report. The primary distinction is between SOC 1 and SOC 2, which serve different purposes:

• SOC 1: Designed specifically for financial services providers, SOC 1 focuses on internal controls over financial reporting. Its scope is entirely different from SOC 2 and SOC 3, and organizations rarely generate both SOC 1 and SOC 2 reports.
• SOC 3: Shares the same criteria as a SOC 2 Type 2 report, but is intended for a general audience rather than technical stakeholders. Many organizations preparing for a SOC 2 Type 2 audit also produce a SOC 3 report to share broad compliance results publicly.
  

Understanding these differences ensures your organization chooses the right SOC framework and avoids unnecessary audits, while still demonstrating strong security and compliance practices.

What About Other AICPA SOC Frameworks?

While SOC 1, SOC 2, and SOC 3 are the most widely known frameworks, they aren’t the only SOC standards your organization might consider.

Industry-specific SOC frameworks exist to address unique security concerns within particular niches, including:

• SOC for Cybersecurity – Focused on evaluating an organization’s cybersecurity controls.
• SOC for Supply Chain – Tailored to assess security and operational risks across the supply chain.

These frameworks provide CPAs and assessors with a standardized way to report actionable insights on your organization’s strengths and areas for improvement, in terms your industry will understand.

If you are planning a SOC 2 compliance or SOC 3 assessment, it’s worth considering whether one of these specialized SOC reports could complement your evaluation and provide additional assurance to clients and stakeholders.

How to Achieve SOC 2 Compliance

Many service organizations pursue SOC 2 compliance not because it is legally required, but because clients and prospects expect it. For organizations preparing SOC 2 reports, it’s important to determine whether a Type 1 or Type 2 report best fits their needs.

At RSI Security, we’ve guided countless organizations through scoping, preparation. Our approach emphasizes vigilance and discipline upfront, which unlocks greater flexibility down the line. In practice, this means your organization can expand confidently within and across industries while maintaining trust with clients.

Next Steps:
To learn more about who needs SOC 2 and how to achieve it, contact RSI Security today for expert guidance.

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