What does it mean to be SOC 2 compliant?

Being SOC 2 compliant means a service organization has implemented controls to meet the AICPA's Trust Services Criteria, ensuring security, availability, processing integrity, confidentiality, and privacy of customer data.

What is the difference between SOC 1, SOC 2, and SOC 3 reports?

SOC 1 focuses on financial controls, SOC 2 focuses on security and Trust Services Criteria for specialized audiences, and SOC 3 is a simplified version of SOC 2 for public use.

What is the difference between SOC Type 1 and Type 2 reports?

SOC Type 1 reports provide a snapshot of an organization's controls at a specific point in time, while SOC Type 2 reports evaluate the effectiveness of those controls over an extended period, typically nine months to a year.

What are the Trust Services Criteria for SOC 2?

The Trust Services Criteria include Security, Availability, Processing Integrity, Confidentiality, and Privacy. Organizations must demonstrate commitment to these principles to achieve SOC 2 compliance.

Does SOC 2 compliance apply to the supply chain?

Yes. Service organizations can include vendors and suppliers in SOC reporting to ensure transparency and strengthen security across the supply chain.

How can a company become SOC 2 compliant?

A company becomes SOC 2 compliant by implementing the required controls, choosing the appropriate SOC reporting type (Type 1 or Type 2), and working with a qualified SOC auditor to produce an official SOC report.

Who Needs to be SOC 2 Compliant?

Q: Who needs to be SOC 2 compliant?

SOC 2 compliance primarily applies to service organizations that store, process, or manage customer data. Common examples include SaaS providers, managed IT and security service providers, finance or accounting service companies, and customer management service providers.

RSI Security

3 weeks ago

Depending on your business and the type of data you handle, you may need to be SOC 2 compliant to meet the security standards set by the American Institute of CPAs (AICPA). SOC reports, SOC 1, SOC 2, and SOC 3, apply mainly to service organizations that store, process, or manage customer data.

So, who exactly needs to be SOC 2 compliant, and what does SOC 2 cover? Keep reading to find out everything you need to know about SOC 2 compliance and how it protects sensitive data

Who Needs to Be SOC 2 Compliance

Understanding SOC 2 requirements can be confusing because the AICPA offers multiple standards and reporting options. If your company handles customer data or provides services that rely on secure systems, you may need to be SOC 2 compliant.

This guide will help you navigate SOC 2 compliance by covering two key areas:

Who SOC 2 standards apply to and why certain organizations must be compliant
What SOC 2 compliance entails, including a detailed breakdown of requirements

By the end of this guide, you’ll clearly know whether your organization needs to be SOC 2 compliant (or SOC 1 or SOC 3) and understand the steps to achieve compliance.

Before diving into the details, let’s start with the basics of SOC 2 compliance.

Brief Overview of SOC 2 Compliance

The main goal of SOC 2 is to help organizations keep sensitive customer data secure. Companies that are SOC 2 compliant demonstrate that they follow strict controls designed to protect data, particularly in cloud computing and cloud hosting services.

Achieving SOC 2 compliance involves implementing a set of controls defined by the AICPA and having an external auditor produce a SOC report.

Different organizations may require different levels of SOC compliance, and companies can choose from various reporting types:

SOC Type 1 – Focuses on the design of controls at a specific point in time
SOC Type 2 – Evaluates the operational effectiveness of controls over a period

Below, we’ll provide a breakdown of SOC 1, SOC 2, and SOC 3 reports and explain which organizations each applies to.

Assess your SOC 2 Compliance

Companies That Need to Be SOC 2 Compliant

Who needs a SOC 2 report? Primarily, SOC 2 applies to most service organizations that handle or manage customer data. (It’s sometimes mistakenly called “Service Organization Controls,” but the official term is System and Organization Controls.)

Common types of service organizations that often need to be SOC 2 compliant include:

Software as a Service (SaaS) companies that provide programs, apps, or websites
Companies offering business intelligence, analytics, or management services
Organizations handling finance or accounting operations
Providers of customer management or other client-facing services
Managed ITand security service providers, including those assisting with SOC 2

If your company fits one of these categories, or provides services similar to these, you may need to be SOC 2 compliant. While these service organizations are the primary focus, the SOC framework also includes guidelines that extend protections to the supply chain and other connected operations.

SOC 2 Compliance and the Supply Chain

Service organizations often rely on vendors, suppliers, and other partners to deliver services to their clients. Each interaction introduces potential security risks, which is why the AICPA developed a voluntary SOC framework for the supply chain.

Companies within a service organization’s supply chain can report on their own security practices, helping service organizations maintain transparency and demonstrate that they are SOC 2 compliant. Incorporating select suppliers into SOC reporting can strengthen overall security, more transparency generally leads to better protection of client data.

The AICPA offers resources to help service organizations and their partners understand SOC requirements. For example:

DC Section 300 – Provides criteria for preparing a supply chain SOC report
Illustrative SOC for Supply Chain Report – Offers a practical example of what your organization or partners should submit

By leveraging these resources, service organizations and their supply chain partners can ensure they meet SOC 2 compliance standards and reduce security risks at every level of operation.

Here are a few more articles to help you learn more about SOC 2 :

Breakdown of the Broader SOC Framework

The AICPA’s SOC framework goes beyond SOC 2 compliance. There are three primary SOC reports, each with its own purpose, criteria, and audience:

SOC 1 – Also called SOC for Service Organizations: Internal Control over Financial Reporting (ICFR), this report focuses on service organizations’ financial controls. Practices are defined in AICPA’s AT-C Section 320.
SOC 2 – Also called SOC for Service Organizations: Trust Services Criteria, this report focuses on security, availability, processing integrity, confidentiality, and privacy. It is intended for specialized readers who need assurance that a service organization is SOC 2 compliant. Practices are defined in AICPA’s TSP Section 100.
SOC 3 – A simplified version of SOC 2 for general use, designed for a public audience without detailed technical reporting.

While SOC 1 is focused on financial controls, SOC 2 and SOC 3 apply to a broader range of service organizations. The main difference is that SOC 2 reports provide in-depth details for specialized readers, whereas SOC 3 reports are suitable for general public use.

Type 1 and Type 2 SOC Reporting

SOC reports come in two primary types, and choosing the right one depends on your organization’s compliance needs.

SOC Type 1 – Provides a snapshot of your company’s security measures at a specific point in time. An external auditor assesses your systems and practices to ensure they meet the trust services criteria. This option is relatively quick, affordable, and straightforward. However, it offers limited long-term assurance.
SOC Type 2 – Measures how your organization adheres to security criteria over an extended period, typically nine months to a year. Rather than a single-day assessment, SOC Type 2 involves continuous evaluation, providing stronger evidence that your company is SOC 2 compliant and consistently maintaining high security standards.

Understanding the difference between Type 1 and Type 2 reporting helps organizations choose the reporting style that best demonstrates their commitment to protecting customer data and meeting SOC 2 compliance requirements.

Trust Services Criteria: Guiding Principles

SOC 2 (and SOC 3) compliance is based on the Trust Services Criteria (TSC), formerly known as the Trust Service Principles. These criteria define the key areas organizations must address to be SOC 2 compliant:

Security – Restricting access to information through proper user authorization.
Availability – Ensuring that authorized parties can access the information when needed.
Processing integrity – Minimizing errors or flaws across all systems and processes.
Confidentiality – Protecting sensitive data through additional safeguards.
Privacy – Safeguarding personally identifiable information (PII) and sensitive personal data.

SOC 2 compliance is flexible: not all criteria must be fully implemented, but organizations must demonstrate commitment to a combination of them without disregarding any principle entirely. Meeting these criteria is essential for companies that want to show they are SOC 2 compliant and trustworthy in protecting customer data.

Professionalize Your SOC 2 Reporting

Returning to the key question: who needs to be SOC 2 compliant? If your company is a service organization that stores or processes customer data, it likely needs to comply with SOC 1, SOC 2, or SOC 3 standards.

To achieve compliance, your organization will need to generate SOC Type 1 or SOC Type 2 reports, depending on your legal, regulatory, or market requirements. Working with a qualified SOC 2 auditor ensures your reports are accurate, audit-ready, and demonstrate that your company is fully SOC 2 compliant.

If your organization falls into this category, contact RSI Security today to begin your SOC compliance journey and professionalize your reporting