SOC 1 and SOC 2 are two types of Service Organization Control (SOC) reports that provide conviction about a service organization's internal controls and procedures.
1. Focus: Financial reporting and internal controls over financial reporting (ICFR)
2. Purpose: To provide conviction to stakeholders (e.g., investors, customers) that a service organization's financial statements are accurate and reliable.
3. Standards: Based on the SSAE 18 (Statement on Standards for Attestation Engagements No. 18) standard.
4. Report: Provides an opinion on the fairness and accuracy of the financial statements and the effectiveness of ICFR.
1. Focus: Security, availability, processing integrity, confidentiality, and privacy of a service organization's systems and data.
2. Purpose: To provide assurance to stakeholders that a service organization's systems and data are secure, available, and processed accurately.
3. Standards: Based on the Trust Services Criteria (TSC) and the AT-C 205 standard.
4. Report: Provides an opinion on the design and operating effectiveness of controls related to security, availability, processing integrity, confidentiality, and privacy.
1. Focus: SOC 1 focuses on financial reporting, while SOC 2 focuses on security and availability.
2. Standards: SOC 1 is based on SSAE 18, while SOC 2 is based on TSC and AT-C 205.
3. Report: SOC 1 provides an opinion on financial statements and ICFR, while SOC 2 provides an opinion on the design and operating effectiveness of controls.
1. Service organizations: Companies that provide services to other organizations, such as cloud storage, data analytics, or payment processing.
2. Publicly traded companies: Companies listed on stock exchanges may require SOC reports to demonstrate compliance with regulatory requirements.
3. Companies in regulated industries: Companies in industries such as healthcare, finance, or government may require SOC reports to demonstrate compliance with industry-specific regulations.
1. Increased trust: SOC reports provide assurance to stakeholders that a service organization's internal controls and processes are effective.
2. Compliance: SOC reports can help service organizations demonstrate compliance with regulatory requirements.
3. Competitive advantage: Service organizations that obtain SOC reports can differentiate themselves from competitors and demonstrate their commitment to security and availability.
