Service Organization Controls (SOC) Reports: Types & Step to follow

In late 2023, the AICPA refreshed its Trust Services Criteria on September 30 and followed up on October 1 with a detailed attestation guide for SOC for Cybersecurity engagements. That summer, the SEC’s July 26 rule began requiring public companies to disclose material cybersecurity incidents within four business days and outline their risk-management governance in annual filings.
For SaaS founders, compliance officers, finance leads, and procurement teams, these changes mean the right SOC report—whether SOC 1, SOC 2, or SOC 3, Type I or Type II—can accelerate enterprise deals or leave you waiting. This article will define each report, walk through the audit process, offer a decision framework, and show how automating evidence collection can shrink prep time from months to days.

What is a SOC Report?

A SOC report is an independent attestation issued by an AICPA-accredited CPA firm that evaluates a service organization’s internal controls over systems and processes such as infrastructure, applications, people, and data against predefined criteria. These reports give customers, auditors, and regulators confidence that a vendor’s practices safeguard sensitive information and support reliable operations.

• SOC 1: Focuses on controls relevant to financial reporting. User auditors rely on SOC 1 reports to assess how a service organization’s processes might affect their client’s financial statements.
• SOC 2: Centers on the Trust Services Criteria (Security, Availability, Processing Integrity, Confidentiality, and Privacy). This is the preferred report for technology and SaaS companies handling customer data.
• SOC 3: Provides the same coverage as SOC 2 but in a broad-level that omits control descriptions and test results, suitable for public distribution.

Types of SOC reports

Organizations rely on SOC reports to demonstrate the effectiveness of control across financial, operational, and security domains. Choosing the right SOC family and understanding the differences between SOC 1 and SOC 2 and the report types can be crucial. At a broad level, here are the key differences.

Criteria	SOC 1	SOC 2	SOC 3
Purpose	Controls impacting user entities’ financial reporting	Controls over security, availability, processing integrity, confidentiality, and privacy	Public summary of SOC 2 scope and opinion
Intended Audience	User auditors, finance teams	Security/compliance officers, technical teams	General public, marketing
Detail Level	Control objectives and tests on financial controls	Detailed descriptions of controls, test procedures, and results	High-level overview without control details or test results
Publicly Shareable	No	No	Yes
Trust Services Criteria Covered	N/A (financial-reporting focused)	Security, Availability, Processing Integrity, Confidentiality, Privacy	Security, Availability, Processing Integrity, Confidentiality, Privacy

SOC Reports: Type 1 vs. Type 2

When it comes to security assurance, timing is everything. Whether you’re chasing a funding round, trying to unstick a sales deal, or prepping for enterprise procurement, the type of SOC report you choose can either accelerate momentum or add months to your timeline. The right decision hinges not just on compliance maturity, but on how quickly you need to prove trust and to whom.
Here’s how Type I and Type II reports stack up so you can match the right level of assurance to your timeline, audience, and stage of growth:

• Type I
  • Snapshot: Assesses the design and implementation of controls at a specific point in time.
  • Timing: Typically delivered within 6–8 weeks.
  • Use case: Fast evidence for early-stage or proof-of-concept discussions.
• Type II
  • Operational: Tests whether those controls operated effectively over a defined period (usually 6–12 months).
  • Timing: Often takes 3–6 months (plus the covered period).
  • Use case: Deep assurance for mature programs and recurring audit cycles.

By aligning your SOC report family and type with stakeholder needs—financial auditors, technical reviewers, or the broader market—you streamline audit efficiency, control costs, and deliver the precise level of assurance your customers and regulators expect.

5 Steps to a Successful SOC report

Preparing for a SOC engagement doesn’t have to feel like an uphill climb. While auditors bring the expertise to test your controls, a clear roadmap and checklist can keep your team on track and reduce surprises.

1. Scoping and planning

Up to 70% of SOC 2 audit delays happen because teams haven’t clearly defined what’s in scope or discover unexpected systems mid-engagement . Taking time to nail down your audit parameters up front saves weeks of back-and-forth later.

• Select your SOC family and report type (e.g., SOC 2 Type II for ongoing assurance).
• Identify systems, processes, and locations that process or store sensitive data.
• Set your audit period (Type I: a point in time; Type II: a 6–12 month window).
• Choose an auditor—an AICPA-licensed CPA firm with SOC experience.

2. Gap analysis and readiness assessment

Before auditors arrive, run an internal “dry run” against the Trust Services Criteria to catch missing or weak controls. This phase lets you uncover issues early, so they don’t turn into formal exceptions.

• Map existing controls to each criterion (Security, Availability, Processing Integrity, Confidentiality, Privacy).
• Document policies, procedures, and control owners in a central repository.
• Gather evidence samples—configurations, logs, screenshots, training records.
• Identify gaps where controls are missing, improperly documented, or inconsistently applied.

Pro tip: Treat this phase as an internal “dry run.” The more issues you find now, the fewer surprises during the auditor’s fieldwork.

3. Remediation and evidence collection

Once gaps surface, it’s time to fill holes and build a robust evidence package. Proper remediation not only satisfies auditors but strengthens your security posture.

• Update or draft policies for incident response, access management, change control, etc.
• Implement technical controls such as multi-factor authentication, encryption, and monitoring tools.
• Run tabletop exercises to validate your incident response process.
• Store evidence in a secure, organized folder structure or a compliance platform.

“Evidence is everything.”— Auditors expect precise timestamps, version histories, and proof of ongoing monitoring. A centralized compliance tool can automate much of this collection.

4. Audit fieldwork

With your readiness confirmed, the auditor takes the lead. This phase tests your controls and surfaces any exceptions in real time.

Auditors will kick off with a meeting to confirm scope, timelines, and the mechanics of evidence delivery. Then they move into control testing—reviewing your documentation, sampling logs, and interviewing control owners to ensure policies translate into practice. You may see issues logged as “exceptions,” which you can clarify on the spot or plan to address afterward. Regular check-ins keep everyone aligned and prevent surprises late in the process.

• Kickoff meeting: Align on scope, timetables, and evidence requests.
• Control testing: The auditor examines your evidence and interviews control owners.
• Issue identification: Any exceptions or control failures are documented in real time.
• Progress check-ins: Regular touchpoints prevent last-minute bottlenecks.

Keep the momentum—slow responses to auditor requests are the most common source of report delays.

5. Reporting and follow-up

Once fieldwork is complete, your auditor drafts the SOC report, detailing tested controls, exceptions, and the overall opinion. This document becomes both your certificate of assurance and your roadmap for improvement.

• Review draft report for factual accuracy and clarify any potential misunderstandings.
• Finalize management response to any exceptions or noted improvements.
• Issue the final report and share it with stakeholders under NDA as needed.
• Plan for next cycle: Use findings to strengthen controls ahead of your next audit.

How to choose the right SOC report?

Choosing the right SOC report starts with understanding what you need to achieve and who will rely on it. Pin down whether your goal is to satisfy a financial audit, demonstrate rigorous security controls, or showcase your trustworthiness to prospects.

• SOC 1 is tailored for organizations that need to prove controls impacting financial statements.
• SOC 2 fits technology and SaaS companies wanting a deep review of security, availability, processing integrity, confidentiality, and privacy.
• SOC 3 delivers a concise, shareable summary when you simply need a public-facing badge of assurance.

Audience

• Finance & Audit Teams → SOC 1: Validates controls that impact financial statements
• Security & Compliance Reviewers → SOC 2: Deep dive on Trust Services Criteria (security, availability, integrity, confidentiality, privacy)
• Marketing, Prospects & Public → SOC 3: High-level trust badge you can share openly

Control Maturity

• Proof-of-Concept / Early Stage → Type I: Snapshot of control design at one point in time
• Established Operations → Type II: Tests control effectiveness over 6–12 months

Timeline & Budget

• Type I
  • 6–8 weeks
  • Lower fees, minimal fieldwork
• Type II
  • 3–6 months of auditor fieldwork (plus the covered period)
  • Higher investment, deeper assurance
• SOC 3
  • Follows your SOC 2 schedule
  • Just a bit of extra drafting for the public summary

Contractual & Market Requirements

• Scan RFPs and procurement checklists for “must-have” SOC attestations
• Identify industry mandates (e.g., SOC for Cybersecurity in finance or healthcare)
• Engage legal, procurement, and security teams early to confirm the exact report you need

Use these concise criteria as your quick-reference guide—pick the SOC report and type that align with who’s reading it, how mature your controls are, how fast you need it, and what your contracts demand.

Before you commit, review any contractual and market requirements. Check RFPs, procurement checklists, and industry standards for specific SOC mentions. Certain sectors such as healthcare, finance, and government may also require niche attestations like SOC for Cybersecurity. Engaging legal, procurement, and security teams early ensures you select the attestation that satisfies every stakeholder.

Here are common scenarios and the SOC approach that fits each one:

1. Fast evidence for an upcoming RFP: If you need a quick design-only snapshot, go with SOC 2 Type I. This option delivers its assurance in six to eight weeks, giving procurement and security reviewers the confidence they need without slowing down your sales cycle.
2. Ongoing proof of controls in operation: When you must demonstrate that safeguards work in practice, choose SOC 2 Type II. That engagement covers six to twelve months of testing, so your compliance team and auditors see firsthand that controls operate consistently over time.
3. Financial-reporting audit: For audits of your financial processes, SOC 1 fits the bill. You can opt for the same quick turnaround with a Type I snapshot or select the full operational review of Type II—whichever aligns with your audit deadlines and depth-of-evidence requirements.
4. Public trust signal: Once you’ve completed a SOC 2 audit, issue a SOC 3 report to create a shareable trust badge. This high-level attestation references the same underlying controls but omits the detailed test results, making it ideal for marketing and executive audiences.
5. Limited time or budget: If your schedule or resources won’t support a full operational audit right away, start with SOC 2 Type I. That gives you immediate coverage while you gather ongoing evidence in parallel—so you’re ready to upgrade to Type II when the timing’s right.

Benefits of SOC reports

SOC reports validate the integrity and maturity of an organization’s security and compliance practices. They turn trust into verifiable proof, demonstrating to customers, regulators, and partners that your controls are not just claimed but independently confirmed. The benefits of SOC reports extend beyond compliance, reinforcing credibility and driving customer confidence.

Here’s how SOC reports translate that assurance into measurable business impact:

1. Enhanced Trust and Credibility: A SOC attestation from an AICPA-licensed firm shows your customers and prospects that your controls have been independently verified. This level of assurance not only builds confidence with enterprise buyers but also replaces the back-and-forth of individual security questionnaires with a single, comprehensive report.
2. Regulatory and Audit Alignment: SOC reports align directly with frameworks such as Sarbanes-Oxley, GDPR, HIPAA, and SEC cybersecurity disclosure rules. By leveraging a SOC 1 or SOC 2 attestation, your finance and legal teams can submit one report to satisfy multiple regulatory obligations, cutting duplicated effort and speeding audits.
3. Competitive Differentiation: In crowded markets, an independent SOC report sets you apart from the competition. Organizations citing SOC compliance win 85% of enterprise deals where it’s requested. Embedding a SOC 3 badge on your website or in your sales collateral further amplifies that trust in the eyes of prospects.
4. Continuous Improvement and Risk Management: The SOC process doubles as a security health check. Detailed findings from each cycle highlight gaps—from change management to incident response—and give you a clear roadmap for strengthening controls. Over successive audits, you’ll see exceptions decrease, demonstrating tangible maturity to your board and customers.

By investing in SOC reports, you not only satisfy the demands of auditors, regulators, and customers but also unlock faster sales cycles, sharper risk visibility, and a position of leadership in your market.

Challenges in getting SOC reports

Attaining a SOC attestation can feel like scaling a mountain—especially when resources are tight, criteria are complex, and timelines are unforgiving. Below, we focus on the most common hurdles and back them with data on why they matter.

1. Limited resources and budgeting

Many organizations underestimate the resources and budgets required for a full SOC engagement.

• Staffing crunch: 62% of small and mid-sized enterprises report they struggle to understand and implement SOC 2 requirements simply because they lack dedicated compliance personnel.
• Audit fees: A SOC 2 Type II audit alone typically costs $20,000–$60,000, not including readiness assessments, remediation work, or internal labor costs.

2. Complex control mapping and scoping

Translating high-level criteria into day-to-day policies and technical configurations often trips teams up.

• Audit delays: Nearly 70% of SOC 2 audits stall because scopes aren’t crystal-clear or unexpected systems fall into scope, forcing last-minute catch-ups.
• Documentation depth: Auditors expect granular evidence—version histories, owner assignments, configuration snapshots for every control.

How can SOC reports be used?

Think of SOC reports as multipurpose tools you can lean on across your business. When used right, they can speed up processes, build confidence with partners, and guide your strategic moves:

1. Streamlining vendor risk reviews

Imagine your procurement team having to deal with 50 vendor questionnaires, each probing different aspects of security and privacy. A SOC 2 report condenses all that into one document. The AICPA’s guide to vendor management explains how aligning each Trust Services Criterion with your risk register lets you replace redundant surveys with a single, authoritative attestation.

2. Accelerating sales cycles

In the back-and-forth of RFPs, even saving a single day on vendor checks feels like a win. Sharing a SOC 1 or SOC 2 Type I snapshot right at the start shows prospects that your financial and security controls have already passed an auditor’s scrutiny. That upfront transparency cuts through procurement red tape and keeps negotiations moving without dragging out control walkthroughs.

3. Consolidating compliance evidence

Many organizations juggle multiple frameworks, such as GDPR, HIPAA, and ISO 27001, each with its own auditors and timelines. SOC 2’s five Trust Services Criteria overlap significantly with these standards. Submitting your SOC attestation as proof of control effectiveness can satisfy numerous audit and regulatory requests, thereby reducing the time your legal and finance teams spend gathering evidence.

4. Fueling continuous security improvement

SOC audits shine a spotlight on control gaps, whether in change management, incident response, or access provisioning. Treating these findings not as “audit fatigue” but as a quarterly reality check embeds security into your operational DNA. Over successive SOC cycles, you’ll see documented exceptions fall, demonstrating tangible maturity to both your board and your customers.

5. Broadcasting trust to the market

A SOC 3 report offers a concise, public-friendly summary that you can badge on your website or in sales collateral. Unlike buried PDFs, a SOC 3 seal becomes part of your brand’s story, a subtle reassurance that an independent CPA has vetted your security, availability, integrity, confidentiality, and privacy controls. For prospects who skim webpages before filling out contact forms, that visual signal can be the nudge that turns interest into a demo request.

Experience seamless SOC automation with Sprinto

Implementing and maintaining SOC reports requires meticulous evidence collection, continuous control monitoring, and seamless collaboration with auditors. Sprinto streamlines this process with an end-to-end SOC automation platform designed for SaaS companies.

1. Automated Evidence Collection: Integrates with your tech stack to pull logs, configurations, and policy documents automatically. This ensures up-to-date proof of controls without manual effort.
2. Real-Time Control Monitoring: Continuously checks your environment against Trust Services Criteria. Instant alerts highlight misconfigurations—so you fix issues before they become audit exceptions.
3. Centralized Control Library: Stores policies, procedures, and evidence mappings in one dashboard. Version histories and owner assignments keep your controls transparent and organized.
4. Audit Collaboration Workspace: Provides auditors secure, read-only access to all requested evidence. This centralized portal cuts back-and-forth and speeds up fieldwork.
5. Compliance Insights and Reporting: Dashboards show your readiness status, track remediation tasks, and forecast completion timelines. Custom exportable reports keep leadership and procurement teams aligned.

By automating repetitive tasks, centralizing controls, and enhancing visibility, Sprinto helps teams cut SOC 2 Type II audit preparation time by up to 70%, freeing your security and compliance professionals to focus on strategic initiatives rather than busywork.

Ready to take the first step? Speak to our experts today.

FAQs

1. When are SOC reports required?

SOC reports become necessary whenever you need to prove the effectiveness of your controls to external parties. You’ll typically see requests for SOC 1 when preparing for financial audits or responding to audit inquiries, while SOC 2 and SOC for Cybersecurity reports are often required during enterprise RFPs, vendor due-diligence processes, or when industry regulations mandate proof of security and privacy practices.

2. How often are SOC 2 reports required?

A SOC 2 Type II engagement is generally performed on an annual cycle to provide continuous assurance over a six- to twelve-month period. You can conduct a Type I audit at any time—often used early in sales cycles—but most organizations schedule their Type II audits yearly to maintain up-to-date evidence of operating control effectiveness.

3. Who manages SOC 2 reports?

Managing a SOC 2 report is a cross-functional effort. Security and compliance teams design and oversee controls, IT and operations teams implement technical safeguards and gather evidence, internal audit or finance functions coordinate with the external CPA firm, and executive sponsors review findings and secure budget for remediation. Successful SOC programs rely on clear ownership and collaboration across all these stakeholders.

4. What is the difference between SOC for Cybersecurity and SOC 2?

SOC for Cybersecurity evaluates your organization’s enterprise-wide cybersecurity risk management program, taking a holistic, programmatic view. SOC 2 focuses more narrowly on system and service-level controls mapped to the Trust Services Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy. Both are issued by AICPA-licensed CPA firms, but SOC for Cybersecurity covers broader governance and risk-management processes beyond individual system controls.

5. Is the SOC report mandatory?

SOC attestations are not legally mandated unless specified by contract or regulation, but they have become de facto requirements for selling to enterprise customers in sectors like finance, healthcare, and government. Without a current SOC report, many organizations find their proposals stalled or rejected during procurement evaluations.

6. Who needs a SOC report?

If your business processes customer data, wants to cut through endless vendor checks, or needs to tick audit and compliance boxes, a SOC report is your go-to. From early-stage startups proving they’ve got security under control to seasoned SaaS providers showcasing battle-tested safeguards, there’s a SOC attestation that fits right where you are.