SOC 2 vs ISO 27001: What’s the Difference and Which Standard Do You Need?
Which is better, SOC 2 or ISO 27001? It’s a question a lot of fast-growing companies face when deciding which type of compliance to pursue.
It’s a tough question to answer, in part because the two frameworks are so similar. But does one hold more prestige with your customers? Is one objectively better than the other?
Find answers to these questions and more in the SOC 2 and ISO 27001 comparison below. You’ll not only learn the key differences and similarities between the two compliance frameworks — you’ll also find advice on making the right choice for your organization.
First, let’s take a look at each individual framework.
What is SOC 2?
SOC 2 is a security and compliance standard created by the American Institute of Certified Public Accountants (AICPA). This framework specifies how organizations should protect customer data from unauthorized access, security incidents, and other vulnerabilities.
A SOC 2 report attests to the the operating effectiveness of an organization’s security protocols and helps establish trust between service providers and their customers.
SOC reports are better-known in the US and therefore typically carry more weight than ISO certifications in the US.
What is ISO 27001?
ISO 27001 is an international standard for security and compliance created jointly by the International Organization for Standardization and the International Electrotechnical Commission. This framework outlines the requirements to establish, maintain, and continually improve an information security management system (ISMS).
ISO 27001 certification provides customers with third-party reassurance that the organization has built an ISMS capable of protecting sensitive data.
While ISO 27001 is popular worldwide, it is most commonly requested by international customers, especially in Europe.
What are the similarities between SOC 2 and ISO 27001?
SOC 2 and ISO 27001 are two of the most rigorous security and compliance standards designed to demonstrate to clients that you can be trusted with their data. Both standards are well respected globally.
Both cover foundational security principles like data integrity, availability, and confidentiality.
According to the ISO 27001 vs SOC 2 mapping spreadsheet by the AICPA, there’s about an 80% overlap between ISO 27001 and SOC 2 criteria. They also share almost all the same controls, varying by as little as 4%.
They both involve an independent audit by a certified third party — and both require significant time, effort, and money to achieve.
If you’re short on time or resources, you’ll need to decide which type of compliance is best to pursue for your organization. In that case, it’s essential that you know the differences between SOC 2 vs ISO 27001.
What are the differences between SOC 2 and ISO 27001?
If a majority of your customers are based in the US, you should opt for undergoing a SOC 2 audit. The SOC 2 Type II has become the industry standard framework for third-party reports when it comes to information security compliance in the US.
If a majority of your customer base is outside of the US, you may want to opt for completing an ISO 27001 audit. An ISO 27001 certification is the gold standard for information security compliance internationally.
That said, many US companies will accept ISO 27001 certification, and many companies outside of the US will accept a SOC 2 report. Ultimately, this decision comes back to what your customers are requesting during their vendor due diligence.
As your company grows, you will likely opt to complete both audits in order to have full coverage across your customer base.
Level of flexibility
With SOC 2, companies can choose which of the five AICPA Trust Services Criteria to include in their audit, and design a system of internal controls that support their selected TSC. Depending on how many criteria they include, organizations need to put between 70 to 150 controls in place and provide documentation and evidence for them. In this way, SOC 2 is a much more flexible framework, allowing companies to adapt controls to their unique systems and services.
ISO 27001, however, focuses more narrowly on information security and has separate standards that cover privacy, business continuity, and other concerns. It has 93 prescribed controls — known as “Annex A controls” — that organizations must implement. If they don’t, then they have to explain why they were excluded in their Statement of Applicability. ISO 27001 also requires exact language to be used in many policy documents as part of the company’s Information Security Management System
How to Write an ISO 27001 Statement of Applicability: Free Template + Example
SOC 2 audits typically have a smaller scope than ISO 27001 audits.
Only one TSC— Security — needs to be included in the scope of a SOC 2 audit. The others — Availability, Confidentiality, Privacy, and Processing Integrity — can be included if they are relevant to your organization’s specific services and customer requirements. Availability and confidentiality are commonly included.
A management assertion, system description, and control matrix are required for any SOC 2 audit. Other compliance documentation may be required depending on which TSC you select.
ISO 27001 is more prescriptive than SOC 2. It requires more systems, policies, and procedures and therefore more robust and detailed documentation. Required documentation for any ISO 27001 audit includes an information security policy, a risk assessment and risk treatment plan, a formal internal audit process, Annex A documents, and the Statement of Applicability.
ISO 27001 also requires that you have a plan to evaluate and improve your ISMS over time.
While costs vary from auditor to auditor, ISO 27001 certification audits are typically more expensive than SOC 2 report audits because ISO requires more documentation to prove a compliant ISMS is in place.
While the exact cost depends on the auditor as well as the scope and complexity of your ISMS and whether you’re pursuing a new certification or completing a surveillance audit, companies can expect to pay $10-50K for an ISO 27001 certification audit on average.
The exact cost of a SOC 2 audit also depends on a range of factors, but companies can expect the cost of a SOC 2 Type 1 audit to be around $10-20K and a SOC 2 Type 2 audit to be around $30-60K on average.
That said, it is possible to receive a substantial discount if you opt to complete both audits with the same auditing firm.
For both frameworks, companies must define their security objectives, conduct a gap analysis, implement the necessary controls, accumulate documentation, and establish a method to review and continually improve security processes.
However, assessor requirements are different. SOC 2 audits must be completed by licensed CPAs, while an ISO 27001-accredited registrar is required to issue an ISO 27001 certification.
In addition, SOC 2 Type 2 reports typically need to be renewed on an annual basis. Most ISO 27001 certificates are valid for three years, with a point-in-time audit at the end of the first year and renewals for the second and third years.
A SOC 2 audit typically takes less time to complete than ISO 27001 certification.
For a SOC 2 Type I report, audit readiness takes an average of 3 months of preparation work if you’re not using an automation platform. Once audit-ready, it takes approximately 2 months to conduct the audit and receive the report in hand for both.
For a SOC 2 Type II report, it can take an average of 4 months to get audit-ready. Once ready, the audit assessment can take between 3 to 12 months depending on your desired audit window. Once the audit window has finished, it can take an additional month to address any follow-ups and receive a report in hand.
For an ISO 27001 certification, audit readiness takes an average of 4 months. Once audit-ready, it takes an average total of 6 months to complete Stage 1 and Stage 2 audits (addressing any gaps in between) and receive your report.
Both SOC 2 and ISO 27001 require a substantial amount of time upfront in order to build and implement the right policies, processes, and controls for your company. A compliance automation platform like Secureframe can significantly speed up the process, cutting down the hundreds of hours of manual work needed to prepare for and complete either audit.
Although both security standards require an external audit, the results of the audit are different.
Only ISO 27001 involves an actual certification. At the completion of an audit, the auditor issues a certificate of compliance that verifies whether the organization meets the International Organization for Standardization (ISO) requirements for protecting information and managing risk.
The result of a SOC 2 audit is an attestation report, which details the auditor’s opinion on whether the organization’s security controls satisfy the relevant Trust Services Criteria.
What Is a SOC report & Why Is It Important?
SOC 2 vs ISO 27001: Which is right for your company?
Both SOC 2 and ISO 27001 are highly respected security frameworks that will strengthen customer confidence in your organization's security posture. Both require a significant commitment in terms of time, money, and effort to achieve. And both will help ensure your organization has best-in-class security practices in place.
So which is a better fit for your company — SOC 2 or ISO 27001 compliance? Or do you need both?
The short answer is that it really depends on your customers.
The most important factor for deciding between SOC 2 and ISO 27001 will come down to what your target market expects and requires. What are your customers asking for? You’ll also want to consider the scope of controls, cost, and project timelines.
Many organizations see the value in attaining both a SOC 2 report and ISO 27001 certification — especially since a good deal of requirements and controls overlap.
Meeting the requirements for both frameworks demonstrates a deep commitment to security and will earn trust with customers across the globe. Secureframe streamlines the SOC 2 and ISO 27001 certification processes with automation, making them faster, easier, and less expensive to achieve compliance with both frameworks. To learn more, schedule a demo or reach out to us at email@example.com.
What's the main difference between SOC 2 and ISO 27001?
The main difference is that SOC 2 provides guidance on how organizations should protect customer data from unauthorized access, security incidents, and other vulnerabilities, whereas ISO 27001 outlines the requirements to establish, maintain, and continually improve an information security management system (ISMS) to protect sensitive information.
What is the difference between an ISO audit and SOC 2 audit?
An ISO 27001 certification audit consists of two stages: the first assesses the design of an organization's ISMS and the second assesses the organization's processes and controls for compliance with ISO 27001 requirements. A SOC audit has only one stage although there are two different types: a Type I audit assesses the design of controls at a point in time and a Type II audit assesses the design and operating effectiveness of controls over a period of time.
Is SOC 2 or ISO 27001 a certification?
There is no such thing as a SOC 2 certification. Instead, companies undergo an examination and receive a SOC 2 report on their controls relevant to security and any other selected Trust Services Criteria. Organizations can go through the certification process for ISO 27001 in order to demonstrate to stakeholders and customers that they are committed and able to manage information securely and safely, but they don't have to.