Confused about which SOC 2 report type is right for your business: SOC 2 Type 1 vs Type 2? You’ve come to the right place.
This blog post will provide a comprehensive overview of the difference between SOC 2 type 2 and type 1, plus tips on choosing one that best fits your organization.
We’ll explore what each report means, how they measure up against each other in terms of security protocols, and more. Get ready to learn everything there’s to know about SOC 2 Type 1 vs Type 2 reports – let’s get started!
What is the difference between SOC 2 Type 1 vs Type 2
SOC 2 Type 1 evaluates the design of controls at a point in time while a SOC 2 Type 2 assesses the effectiveness of these controls over an observation period typically spanning between 6 months and a year. Hence, SOC 2 Type 1 takes less time than SOC 2 Type 2, but it is less extensive.
The SOC 2 report outlines any service organization’s controls through the Trust Services Criteria (TSC). This includes five criteria: security, availability, processing integrity, confidentiality, and privacy.
Both SOC 2 Type 1 and Type 2 reports are designed to safeguard client data by aligning with the Trust Services Criteria. They help organizations demonstrate their commitment to secure, confidential, and reliable data handling practices.
Not all five criteria are mandatory—the security TSC is a common criteria while the others apply depending on an organization’s services, operations, and compliance requirements.
SOC 2 Type 1 vs Type – Quick Comparison
| Category | SOC 2 Type 1 Report | SOC 2 Type 2 Report |
|---|---|---|
| What? | – Confirms your internal controls exist – Checks design only- Snapshot at a specific point in time | – Confirms your internal controls exist – Checks both design and operational effectiveness – Evaluated over time (typically 3–12 months) |
| Why? | – Good for early-stage companies – Ideal if you’re starting your SOC 2 journey – Useful when you’re short on time or need to close a quick deal | – Ideal if you’ve already completed Type 1 – Great for demonstrating mature security practices – Preferred by enterprises and security-conscious clients |
| Monitoring Period | – Point in time | – Continuous period (3–12 months) |
Now, let’s deep dive into what SOC Type 1 vs Type 2 are:
SOC 2 Type 1
SOC 2 Type 1 is an attestation report issued by an independent CPA firm that evaluates the design of a service organization’s controls against the AICPA Trust Services Criteria at a specific point in time.
Organizations wishing to establish this type of security must undergo an evaluation to assess whether the internal controls they have put in place are suitably designed. It is important to note that the Type 1 audit can be completed in a matter of weeks.
SOC 2 Type 2
SOC 2 Type 2 determines the operating performance of your security controls over a period of time ranging from three to twelve months. Type 2 audits are costlier and lengthier because of the depth of analysis. It provides a comprehensive view of the effectiveness of your security controls.
A SOC 2 Type 2 report will help you identify whether your security controls are working as intended. It will give you peace of mind and confidence about your services.
This means that while the shorter Type 1 can only attest to whether the design is suitable, the more extensive Type 2 report has the additional capability of verifying controls’ effectiveness.
Get a better understanding: Download SOC 2 controls list
Should you choose SOC 2 Type 1 or Type 2 based on your organization?
Whether you need a Type 1 or Type 2 report, both require an examination by an independent CPA firm licensed to perform SOC examinations under AICPA standards. The key question is: which SOC 2 report fits best for your service organization?
It is worth noting that SOC 2 is not a certification; it is a formal attestation issued by an independent auditor confirming that your controls meet the AICPA Trust Services Criteria. Understanding this distinction matters when communicating your compliance posture to customers and partners.
When selecting the right report, consider the maturity of your security program, the type of data you handle, and what your customers expect:
- If you’re early in your security journey or need to demonstrate control design quickly, for example, to close an enterprise deal or respond to a security questionnaire, a Type 1 report may be the right starting point. It confirms that your controls are suitably designed at a specific point in time and can be completed in weeks.
- If you’ve been operating your controls consistently and want to demonstrate ongoing effectiveness to enterprise customers, Type 2 is usually expected. It covers a period of three to twelve months and provides deeper assurance that your controls are not just designed correctly but working as intended every day.
Whatever direction you go, focus on getting the right SOC 2 report for your organization’s current stage and customer requirements, not just the fastest or cheapest path to attestation.
Also read: SOC 2 Compliance checklist
How SOC 2 type 1 or type 2 will benefit you?
Here is how a SOC 2 Type 1 or Type 2 will benefit your company:
Improve security posture
Ensuring the security of mission-critical data and systems is a basic requirement for any organization. Therefore, conducting a regular review of your security posture is essential.
SOC 2 Type 1 & 2 attestations can help with this by providing a detailed look at your company’s controls over information systems and the services they provide.
Not only do these attestations allow you to benchmark your current performance, but they also serve as an important certification that potential clients may require.
With SOC 2 attestations, you can have confidence in the future and trust in knowing your security posture is strengthened and up-to-date.
Build customer trust
For any organization, trust is paramount. If your company suffers a data breach, your clients may go elsewhere, resulting in total business loss.
Our uncertainty about the present and future makes it increasingly necessary to take proactive steps to secure our systems. That’s where SOC 2 Type 2 comes in. Following a security incident, a SOC 2 Type 2 report can help restore customer confidence by demonstrating that controls have been strengthened and independently validated over time, providing concrete evidence of improvement rather than just assurances.
Even for companies not yet affected by an attack, this attestation can bring a competitive edge that puts them ahead of their uncertified peers.
Customers will be reassured knowing that an independent third party has assessed your security controls and found them adequate. This can help you to win new business and retain existing customers.
Reduce the risk of data breaches
A SOC 2 engagement helps identify control gaps and strengthen security posture, which can reduce the likelihood of incidents when properly addressed. The assessment surfaces weaknesses in your security controls that attackers could exploit, but the real value lies in acting on those findings. Organizations that treat SOC 2 as an ongoing improvement process rather than a one-time audit are better positioned to prevent breaches before they occur.
The cost of a data breach is far greater than that of a SOC 2 Type 1 or Type 2 audit. In fact, according to IBM, the average cost of a data breach in 2022 was $4.35 million – an increase of almost 10 percent from the year before.
One of the highest financial losses comes from reputation damage, accounting for roughly 38 percent of the total costs associated with the breach. Safeguarding against such violations is paramount and worth any investment necessary.
Remedying these weaknesses will make it much harder for attackers to breach your systems successfully.
Marketing Differentiator
Companies need a SOC 2 report to demonstrate their adherence to rigorous industry standards, which can be an essential selling point in a competitive market. (here are some SOC 2 report examples)
Obtaining a SOC 2 attestation sets you apart from your competition. It shows customers that you have gone the extra mile by investing time and capital to ensure compliance with these requirements.
With a SOC2 Type 1 or, better yet, a Type 2 report, you can proudly showcase your dedication to providing secure services and trustworthiness.
Demonstrate commitment to security
Having SOC 2 type 1 or 2 attestation is such a great tool for demonstrating to shareholders, customers, partners, and other stakeholders that your company is making the best effort to bring its security measures up to the highest standard.
Not only will this improve brand perception, but it can also inspire greater confidence in your ability to protect sensitive data, which is priceless.
What’s Next?
Your next SOC 2 audit doesn’t have to be a grueling experience. With Sprinto, you can rest assured that your journey will be well-planned and precise. Our platform provides accurate controls and checks to move forward with your audit without any issues.
Plus, part of our service includes automation – we’ll take care of the manual, time-consuming tasks for you so that you can focus on higher-value activities. Ready to get started? Book your free demo today and discover how Sprinto can help you easily conquer the SOC 2 world.
FAQs
A SOC 1 Type 2 report covers the controls at a service organization that are relevant to user entities’ internal control over financial reporting. It includes an examination of the service organization’s controls over a specific period of time, typically six months, and the report provides an opinion on the fairness of the presentation of the service organization’s description of its system and the suitability of the design and operating effectiveness of the controls. The report is intended for use by user entities and their auditors.
SOC 1 and SOC 2 reports are not legally mandatory, but many customers, particularly enterprises and regulated industries, contractually require them as a condition of doing business. A SOC 1 report is relevant when your services impact a customer’s financial reporting controls. A SOC 2 report is more broadly applicable, evaluating how effectively your security and operational controls are designed and implemented. If you’re handling sensitive customer data, a SOC 2 report is generally the more relevant starting point and increasingly, a baseline expectation rather than a differentiator.
SOC 2 Type 2 report is needed by organizations that store and manage customer data on the cloud, such as SaaS providers or cloud service providers. They should obtain a SOC 2 report to demonstrate their responsibility in safeguarding personal information from intruders. A valid report proves trustworthiness and confirms that their precious data is safe with you.
If you’re just starting with SOC 2 or need to demonstrate security readiness quickly, Type I is the best place to begin. It confirms that your security controls are in place and designed correctly, but it reflects a single point in time.
Type II goes further. It shows that your controls are not only in place but have been followed consistently over a period of time, usually 3 to 12 months. This helps build deeper trust with customers by proving operational maturity.
Think of it like this:
– Type I says, “We’ve designed the right systems.”
– Type II says, “We’ve been using them correctly every day.”
Early customers, especially smaller teams, may be fine with Type I. But if you’re aiming to sell to mid-market or enterprise companies, or if you’re dealing with sensitive data, most customers will expect a Type II report.
The five Trust Services Criteria (TSC) are Security, Availability, Processing Integrity, Confidentiality, and Privacy. Security is required in every SOC 2 engagement. The other four are included based on what your service promises customers and what you want in scope.
Author
Meeba Gracy
Meeba, an ISC2-certified cybersecurity specialist, passionately decodes and delivers impactful content on compliance and complex digital security matters. Adept at transforming intricate concepts into accessible insights, she’s committed to enlightening readers. Off the clock, she can be found with her nose in the latest thriller novel or exploring new haunts in the city.
Reviewer
Sneha Shenoy
Sneha is a Compliance Analyst at Sprinto focused on governance, risk management, and regulatory compliance. She enjoys interpreting and mapping global security frameworks into operational controls, policies, and automated monitoring workflows to help organizations achieve continuous compliance.Go beyond the surface and uncover the governance, risk, and compliance insights that actually matter.
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