SOC 2 is a voluntary compliance standard established by the American Institute of Certified Public Accountants (AICPA) to ensure organizations properly manage consumer data. While not mandatory, achieving SOC 2 compliance is a strong indicator of your organization’s commitment to data security and privacy.
To become SOC 2 compliant, an independent auditor evaluates which Trust Services Criteria (Security, Availability, Processing Integrity, Confidentiality, Privacy) apply to your organization and assesses whether your security controls meet these requirements.
Auditors can conduct this assessment in two ways, which leads to the distinction between SOC 2 Type I and II. In this article, we will discuss the differences between both reports and how to decide which one is best suited for your organization.
SOC 2 Type I
The primary distinction between SOC 2 Type I and Type II lies within timing. A SOC 2 Type I report is more focused on the short-term, as it is analyzing how your security controls are functioning at that moment in time. Given the brief nature of the assessment, auditors are focused on the design of the controls rather than their operational effectiveness.
This report is better suited for organizations, particularly new SaaS startups, that are looking for a quick and easy way to achieve SOC 2 compliance. Although the report is not as in-depth, it can be a great way for an organization to quickly alleviate client security concerns. This report is also more cost-effective, so it can be beneficial for those with a tighter budget.
SOC 2 Type II
In contrast to the quick turnaround with Type I, SOC 2 Type II is a report that analyzes an organization’s security controls over a larger period of time, typically from six months to a year.
The thorough audit process offers greater insight into how consistently an organization’s controls are functioning.
Conducting this audit is a lengthy process and could potentially require more oversight from your team. That being said, achieving SOC 2 Type II compliance carries greater significance, further assuring to your stakeholders that their data is being protected.
Which one should I pick?
There are several factors to consider when deciding which type of report is best for your organization. It is best to ask yourself:
- Is it realistic to achieve SOC 2 Type II compliance at this stage?
- Do I have the time and resources to achieve Type II?
- How urgent is it for my organization to achieve SOC 2 compliance?
- Are my clients concerned about my organization’s SOC 2 compliance?
- Will my clients be more satisfied with Type I or Type II?
One thing to consider is that an organization can always start with SOC Type I and eventually transition into Type II when the circumstances allow for it. You can communicate that transition with your clients, emphasizing how compliance is an ongoing process and a core pillar to your business.
The bottom line
Regardless of which report you choose, obtaining either one demonstrates that your organization is taking necessary steps to ensure data integrity. Ultimately, the key is to align your compliance strategy with your organization’s goals, resources, and client expectations to ensure a strong foundation for long-term security.
