SOC 2 vs ISO 27001: Which Security Standard is Right for You?

SOC 2 and ISO 27001 have been the most common contenders in the compliance landscape, and many companies ask us which one they need. Is one better than the other? The answer depends on a number of aspects and can vary depending on what you’re looking for.

Read on to understand the differences and similarities between the two frameworks and which one to choose when.

What are SOC 2 and ISO 27001?

SOC 2 (System and Organization Control) is a voluntary standard developed by the American Institute of Certified Public Accountants (AICPA) that applies to service organizations handling sensitive customer data. The AICPA specifies that organizations must maintain control effectiveness to meet the 5 Trust Services Criteria—Security, Availability, Confidentiality, Processing Integrity and Privacy.

whereas,

ISO 27001 or ISO/IEC 27001 is an international standard that outlines the requirements for developing and maintaining an effective Information Security Management System (ISMS). The framework’s goal is to maintain confidentiality, integrity, and availability of data to minimize information security risks.

The standard was developed in 2005 by the International Organization for Standardization (ISO) in partnership with the International Electrotechnical Commission (IEC). The current standard was updated in 2022 and you can learn more about ISO 27001 requirements here.

What is the difference between SOC 2 and ISO 27001?

SOC 2 and ISO 27001 are trusted frameworks for safeguarding data. SOC 2 emphasizes cybersecurity controls for customer data, while ISO 27001 focuses on the overall effectiveness of an organization’s ISMS (Information Security Management System).

Area of focus	SOC 2	ISO 27001
Focus	Evaluates the effectiveness of cybersecurity controls to protect customer data.	Assesses the overall effectiveness of an organization’s ISMS for managing information security.
Type of framework	A compliance framework based on the AICPA Trust Service Criteria.	An international standard developed by ISO for managing information security systems.
Application	Tailored for service organizations, particularly those handling customer data.	Applicable to organizations of any size, across industries, seeking a structured ISMS.
Certification process	Results in an attestation report issued by an independent auditor (Type I or Type II).	Results in formal certification awarded by an accredited certification body.
Scope of coverage	Focuses on specific Trust Service Categories like Security, Availability, and Privacy.	Covers broader information security practices across the organization, including risk management.
Geography	More commonly used in the United States.	Recognized and valued globally as an international standard.

Here are the detailed differences between SOC2 and ISO 27001

1. Scope and Focus

SOC 2, scope can be limited to one Trust Service Criteria ie. Security is the mandatory criterion. The applicability of other criteria depends on the type of services the organization provides. So SOC 2 is a flexible compliance framework and requires organizations to implement 70 to 150 SOC2 controls based on the Trust Service Categories selected.

ISO 27001 focuses on all aspects of information security and requires organizations to establish, maintain, and continuously improve an ISMS. In this case, the organization cannot choose controls as ISO 27001 requires organizations to implement all 93 controls in Annex A under ISO 27001.

2. Attestation Vs Certification

A SOC 2 audit is performed by a licensed CPA firm and attests to the effectiveness of an organization’s internal controls. It is important to note that there is no such thing as a SOC 2 certification; instead, the audit results in the issuance of a SOC 2 report. The attestation process requires selecting appropriate trust service principles, testing controls related to each, and collecting evidence.

An ISO 27001 certification vs SOC 2 attestation differs in execution and outcomes. An ISO 27001 audit is conducted by an accredited certification body that evaluates the effectiveness of the organization’s ISMS (Information Security Management System). Based on the findings, the independent auditor issues an ISO 27001 certification to the organization.

When comparing ISO 27001 certification vs SOC 2 attestation, understanding the key differences in frameworks and results can help organizations decide which standard aligns better with their business goals and regulatory needs.

3. Target Market

SOC 2 is mostly in demand in North America and is generally accepted by U.S. companies. However, digital businesses even outside the USA are now demanding SOC 2 reports because of the rigorousness and reputation of the standard.
SOC 2 is widely adopted by service organizations that handle sensitive customer data, such as Cloud service providers, SaaS, IT services, etc. Vendors often request it as part of their due diligence to ensure data security.

Read how Kodif moved towards enterprise readiness with SOC 2 compliance

ISO 27001 compliance on the other hand, is globally recognized and accepted by companies worldwide seeking assurance on information security.
While vendors may not specially request ISO 27001, you can always capitalize on its credibility and win enterprise clients as it is good to have. It is used in industries such as IT, Finance, telecommunications and healthcare.

One of our clients Giift was dealing with enterprise customers and wanted to minimize the time taken to fill security questionnaires. They opted for ISO 27001 with Sprinto and completed implementation in 8 weeks. Ever since they have achieved the certification the time taken to respond to these questionnaires has been significantly reduced. Read the story here

4. Framework Structure and Audit

The SOC 2 framework structure is centred around the 5 Trust service criteria with 60+ requirements under these. The organization is audited based on the chosen Trust principles and the security criteria is the mandatory one. A SOC 2 audit results in a SOC 2 report can be Type 1 or Type 2. 

A SOC 2 Type 1 evaluates the design of controls at a point in time. A SOC 2 Type 2 assesses the design and operating effectiveness of controls over a period of time which is 6-12 months.

ISO 27001 structure is organized into clauses and annexures. The ISO 27001 controls are high-level and are grouped under 4 themes—People, Organizational, Technological and Physical.  The latest version has 93 controls and the ISMS is audited based on the Plan-Do-Check-Act (PDCA) cycle.

ISO 27001 has a two-stage external audit process. Stage 1 audit involves a preliminary review of the ISMS followed by a detailed Stage 2 audit that evaluates the effectiveness and implementation of the information security system.
The certification is issued after Stage 2 audit and surveillance audits are annually conducted to ensure ongoing compliance

5. Timelines

SOC 2 and ISO 27001 timelines can vary greatly. For instance, SOC 2 compliance timeline changes based on the type of compliance you are opting for. 

For SOC 2 Type I the process can typically take anywhere from 2-3 months, depending on factors such as:

• The maturity of your existing controls.
• The complexity of your organization.
• The availability of documentation and resources.

SOC 2 Type II compliance, on the other hand, involves demonstrating the operational effectiveness of your controls over a defined period—6 to 12 months, broken down into:

1. Preparation phase (1-3 months): Readying your controls, addressing gaps, and implementing necessary processes.
2. Observation period (3-12 months): Operating controls and collecting evidence during the defined observation period.
3. Audit phase (1-2 months): Completing the audit and receiving the final report.

ISO 27001 on the other hand can take between 6-24 months because of the comprehensiveness involved.

As for renewals, SOC 2 compliance is valid for one year and requires a renewal audit annually. ISO 27001 is valid for 3 years but requires annual surveillance audits

6. Granularity of Report

SOC 2 report is more granular and gives details on every aspect of the audit. It includes external auditor’s opinion, management assertion, system description, effective controls list and tests.

The ISO 27001 report is less granular and gives a bird’s eye view of the audit findings. It does not highlight which parts of the systems have non-conformities.

Similarities between ISO 27001 and SOC 2

SOC 2 and ISO 27001 are usually compared because they share certain similarities. Let’s have a look at these similarities:

1. Voluntary but internationally recognized

Both ISO 27001 and SOC 2 are voluntary standards and not mandatory regulations like GDPR and HIPAA. However, both are internationally recognized and in huge demand because of the focus on stringent information security requirements.

2. Control overlap

ISO 27001 and SOC 2 have more than 90% control overlap as they aim to protect sensitive information. Some examples of common controls include incident management plans, access controls, physical security, change management, vendor management, and data backups.

Here’s AICPA’s downloadable ISO 27001 vs SOC 2 mapping in excel.

3. Focus on information security

The primary goal of both ISO 27001 and SOC 2 frameworks is to ensure that information is protected against unauthorized access and disclosure. SOC 2 aims to maintain customer data privacy and security, while ISO 27001 concerns ensuring a secure ISMS.

4. Key to building trust with clients

ISO 27001 and SOC 2 are widely accepted by customers and key market differentiators when you are looking for enterprise deals.

When our client Recruit CRM found their compliance confidence, they onboarded 2 enterprise clients within 30-45 days.

5. Third-party validation

Both security standards require external audits or assessments. In the case of SOC 2 the third-party validation results in an attestation while for ISO 27001 it results in certification.

6. Ongoing maintenance and improvement

None of the frameworks are a one-and-done process and require ongoing maintenance and improvement for period assessments. This requires a continuous monitoring mechanism for both to stay ever-compliant.

Which framework should you use? ISO 27001 vs SOC 2?

ISO 27001 vs SOC 2, the decision between this would rest on your organization’s target market, customer requirements, and your security posture and ambitions.

While many organizations eventually grow to get both frameworks, if you have to choose one over the other, here are some factors worth considering.

The two compliances aren’t mutually exclusive. For that matter, they overlap roughly 80% depending on the size of the organization and the scope of the audit. So, you could also consider pairing the two.

From an audit standpoint, the overlap of requirements and controls makes the compliance journey relatively easier. Besides, in our experience, most organizations typically go on to add both frameworks as they grow and expand in new geographies.

Take the guesswork out of SOC 2 compliance! Download our free SOC 2 Self-Assessment to assess your current setup, identify gaps, and plan your next steps with ease. Get your copy today and set yourself up for smooth, confident compliance.

The smarter way to get compliant

If you have international clients with a strong US presence, you’ll mostly need both frameworks. However, since the standards overlap by about 90%, you can simultaneously prepare for both without duplicating efforts. This is where compliance automation platforms like Sprinto precisely play their part.

Sprinto helps you easily map common controls and minimizes the effort to gather evidence repeatedly. So, for example, if access controls are a requirement under both frameworks, you’ll implement them once with the platform, and Sprinto will automatically collect evidence for both regulatory requirements to expedite the certification process.

You can also use our tool Cross Sprint to easily check the effort required to become compliant with multiple frameworks.

Read how DNIF achieved SOC 2 and ISO 27001 readiness in 14 days! The company leveraged Sprinto’s documentation templates, integrated various applications with Sprinto for automated evidence collection and streamlined compliance with automated workflows.

Want to see Sprinto in action? Talk to us today and get SOC 2 and ISO 27001 compliant with ease.

FAQs

Is an ISO 27001 certification equivalent to a SOC 2 report?

While presenting an ISO 27001 certification can assure customers about strong information security practices, it is not a substitute for a SOC report. Clients, especially in the US won’t be satisfied without a SOC 2 report and you may attract detailed questionnaires or RFIs.

How to take advantage of the SOC 2 and ISO 27001 certification?

If you have a SOC 2 report and an ISO 27001 certification, make sure to display the badge on the website, talk about it on social media, or have a dedicated Trust center to share your live compliance status with the prospects. This enhances customer confidence and brings positive public perception.

What is the difference in costs involved for SOC 2 and ISO 27001?

ISO 27001 is more expensive than SOC 2 because of the comprehensiveness of control implementation. Take, for example, the audit costs for security TSC can be $20000 while an ISO 27001 certification audit can cost $30000-$60000.

Can you fail a SOC 2 audit?

While you do not fail a SOC 2 audit, you receive an auditor opinion in the report. If the controls are not properly designed or implemented, the auditor can give the following:

Qualified opinion: The controls meet the requirements but with exceptions

Adverse opinion: There is a failure in one or more areas

Disclaimer of opinion: There is scope limitation or other issues that hinder the auditor’s ability to form an opinion.

What happens if you fail an ISO 27001 certification audit?

If you fail an ISO 27001 certification audit, the auditor will issue a non-conformance report highlighting major and minor non-conformance. You will be requested for corrective action and there will be a follow-up audit which can delay the certification. If you are already certified, your certification can be suspended and the frequency of surveillance audits may increase.