SOC 2 Type 1 vs Type 2

 

The prevalence of cyber security attacks and data breach in the recent years have brought to light   how vulnerable organizations are to a cyber-attack. The financial losses and the tarnish of reputation caused by such attacks cannot be underestimated by any organization handling confidential data. Data breach still continues to be a pressing concern for companies across the globe. Indeed, information security has now become a major concern for organizations handling sensitive data and including those who outsource their business requirements to third-party organizations such as SaaS providers, data analytic companies and Cloud computing providers.

Needless to say, all IT managers and security stakeholders have been scrambling to find ways to tackle the situation and gain control over their network and data security. One way to ensure the security and privacy of data is by obtaining a SOC 2 Type1 & Type 2 report from a CPA. So, let us today understand in detail about the SOC 2 audit and its application to your organization. 

 

Table of Contents

• What is SOC 2 audit
• Types of SOC 2 report
  • SOC 2 Type 1 Definition:
  • SOC 2 Type 2 Definition:
•  Difference between SOC 2 type 1 & type 2
• Application of SOC 2 type 1 & type 2 for service organizations
  • SOC 2 Type 1 Audit:
  • SOC 2 Type 2 Audit:
  • Closing thought

What is SOC 2 audit

[bctt tweet=”A SOC 2 report essentially verifies whether an organization is in compliance with the requirements relevant to Security, Processing integrity, Availability, Confidentiality, and Privacy. #soc2 #soc2report #soc2audit” username=”VISTAINFOSEC”] It is an audit meant for service organizations that holds, stores, or processes private data of their clients. A SOC 2 audit report provides the organization and its clients an assurance that the reporting controls are suitably designed, well in place, and client’s sensitive data is appropriately secured. 

 

Types of SOC 2 report

SOC 2 audits constitute two types of audit reporting, namely SOC 2 Type 1 & SOC 2 Type 2. Both the types of reports are meant to tackle the reporting controls and processes of a service organization related to the five trust principles of data. For more info on which Trust Principles are relevant to your organization, check out my earlier article ( SOC 2 Trust Service Criteria)

SOC 2 Type 1 Definition:

SOC 2 Type 1 is a report on a service organization’s system and the suitability of the design of controls. The report describes the current systems and controls in place and review documents around these controls. Design sufficiency of all Administrative, Technical and Logical controls are validated.

SOC 2 Type 2 Definition:

SOC 2 Type 2 Report is very similar to the Type 1 report, except that the evidence of control effectiveness are described and evaluated for a minimum of six months to see if the systems and control in place are functioning as described by the management of the service organization. 

(Note- SOC 2 Type 1 & SOC 2 Type 2 are two different stages of achieving SOC 2 Compliance.)