WHAT SETS SOC 1 AND SOC 2 APART?
It is simple to mix up a SOC 1 and SOC 2 audit. Although they both attest to the controls in place inside your organisation, the two compliance frameworks have different focuses. The focus of this blog article will be on examining the distinctions between SOC 1 and SOC 2. Also know more about soc 1 vs soc 2
DESCRIBE SOC 1
The user entities of your firm can have some peace of mind knowing that their financial information is handled securely and safely thanks to a SOC 1 report. The Statement on Auditing Standards 70 (SAS 70), which was later superseded by the Statement on Standards for Attestation Engagements no. 16 (SSAE 16), was the previous name for the SOC 1 report. Type 1 and Type 2 reports are both available from SOC 1. Internal financial controls for your business are properly installed according to a Type 1 report, and a Type 2 report demonstrates that your controls continue to function as intended overtime.
Describe SOC 2
SOC 2 is a framework that aids service organisations in showcasing their data centre and cloud security measures. The SOC 2 was created as a report that exclusively addressed security when businesses began utilising the SAS 70 to gauge the efficiency of their security systems. The Trust Services Principles serve as the foundation for SOC 2.
Security: Systems and data must be shielded from intrusion and anything that might jeopardise their integrity, confidentiality, availability, and privacy.
- System accessibility is important for usage and operation.
- Processing integrity calls for quick, accurate, and authorised system processing.
- Confidential information must be protected in the appropriate ways.
- Privacy is any personal data gathered must be utilised, stored, disclosed, and disposed of responsibly.
Similar to SOC 1, SOC 2 offers Type 1 and Type 2 reports. The Type 1 report is a snapshot of your organization’s controls at a particular moment in time that has been tested to see if they are properly designed. The Type 2 report examines the performance of the same controls over a longer time frame, often 12 months.
When Should I Get SOC 2 Certified?
If the financial reporting of your clients is impacted by your services, your company should target SOC 1. For instance, if your company develops software that handles billing and collection data for your clients, you are influencing their financial reporting, thus a SOC 1 is acceptable. When clients want a “right to audit,” organisations may opt for SOC 1 rather than SOC 2. Without SOC 1, this may be an expensive and time-consuming procedure for both sides, particularly if numerous of your clients submit requests that are identical to one another. SOC 1 compliance may also be necessary as a part of a compliance obligation. As part of the Sarbanes-Oxley Act (SOX), you must seek SOC 1 if your business is publicly listed, for instance. The scenario at your organisation will determine whether you should pursue SOC 1 or SOC 2.