There are two different types of AICPA SOC 2 attestation reports to choose from:
- A SOC 2 Type 1
- A SOC 2 Type 2
Both are valuable and serve a specific purpose, so you'll need to decide which attestation report you need before starting the audit process.
To do that, you're probably asking yourself:
What's the difference between a SOC 2 Type 1 vs Type 2 report?
Keep reading or check out the video below for the answer.
What is SOC 2 Type 1?
SOC 2 Type 1 compliance evaluates an organization’s cybersecurity controls at a single point in time.
The goal is to determine whether the internal controls put in place to safeguard customer data are sufficient and designed correctly. Do they fulfill the required Trust Services Criteria?
Type 1 audits and reports can be completed in a matter of weeks.
What is SOC 2 Type 2?
A SOC 2 Type 2 report examines how well a service organization's system and controls perform over a period of time (typically 3-12 months). What is their operating effectiveness? Do they function as intended?
Type 2 audits can take 12 months to complete and are more expensive than Type 1 audits.
SOC 2 Type 1 vs SOC 2 Type 2: Which Should You Choose?
Both Type I and Type II reports require an audit by a qualified service auditor or CPA firm. So the key question is:
Which type of SOC 2 report is right for your service organization?
Most often, the decision boils down to timelines.
Say you need to demonstrate compliance ASAP because an important enterprise prospect requires it to close the deal. But your company is too young to have formal systems in place, or you’ve recently made major changes to your data security systems.
Instead of waiting for a Type 2 report, a Type 1 report that evaluates your information security controls as they stand today can act as a short-term solution.
If possible, we recommend going straight for the SOC 2 Type II report.
Many potential customers are rejecting Type 1 SOC reports, and it's likely you'll need a Type 2 report at some point. By going straight for a Type 2, you can save time and money by doing a single audit.
If you need a SOC 2 report ASAP, a Type 2 audit report that covers a shorter 3-month review period can be an ideal solution.
SOC 2 Readiness Checklist
Use this step-by-step checklist to assess your SOC 2 audit readiness.
FAQs
What is the difference between SOC 2 Type 1 and Type 2?
SOC 2 Type 1 evaluates whether controls are designed properly at a point of time, whereas SOC 2 Type 2 evaluates whether controls are designed and functioning as intended over a specified period of time.
Who needs to be SOC 2 Type 1 compliant?
Organizations that store, process, or transmit sensitive customer data and need to provide assurance to prospects that their data will be handled securely may need a SOC 2 Type 1 report. This type of report is an excellent short-term solution if your company is trying to close a deal quickly, is too young to have formal systems in place, or has recently made major changes to your data security systems.
Who need to be SOC 2 Type 2 compliant?
Organizations that store, process, or transmit sensitive customer data will likely need a SOC 2 Type 2 report at some point. Unlike a Type 1 report, a Type 2 report addresses the suitability of the design and operating effectiveness of your organization's controls over time. This provides greater assurance to customers and prospects that you'll keep their data safe and indicate a level of maturity at your organization that can help unlock enterprise deals.
