As more customers ask for demonstrated SOC 2 reports, achieving a SOC 2® has become even more necessary for today’s service organizations looking to gain an edge in the increasingly competitive market.
There are two SOC 2 reports options to consider:
SOC 2® Type 1: An audit report attesting to the suitability of the design of controls as of a specific date.
SOC 2® Type 2: An audit report attesting to the suitability of the design and operating effectiveness of controls over an audit period, typically 6 or 12 months.
Which type of SOC 2® examination is the right choice for my organization?
It is not required that service organizations obtain a Type 1 report before a Type 2; however, it is important to consider the differences between the two.
Some differences between the two types of SOC 2® examinations:
SOC 2® Type 1:
- A SOC 2® Type 1 report demonstrates control design effectiveness in accordance with the applicable Trust Services Criteria as of a specific date, a point in time.
- Type 1 audits require less preparation than Type 2 audits, as only suitable control design needs to be evidenced, usually in documented policies and procedures.
- The cost of a Type 1 report is typically lower than the cost of a Type 2 report.
- A Type 1 report will most likely be the right choice for a service organization’s first SOC 2® report, especially for the organization with no prior attestation that needs to demonstrate compliance to maintain existing clients or gain potential clients. Achieving a Type 1 report first builds the foundation for a Type 2.
SOC 2® Type 2:
- A SOC 2® Type 2 audit report will give customers the highest level of assurance, demonstrating that controls are both designed appropriately and that they are operating effectively in accordance with the applicable Trust Services Criteria over a period of time.
- For a Type 2 audit, more preparation is necessary as the design of SOC 2® controls and their operation will need to be evidenced throughout the period.
- The cost of a Type 2 report is higher as the report requires more extensive testing.
- Type 2 reports are a fine choice for service organizations that have already had a Type 1 audit prior, or for an organization that has the time and resources to undergo the necessary readiness and more extensive testing.
- When a service organization is ready to undergo a SOC 2® Type 2 audit, it is also important to consider the length of the audit period. Most commonly audit periods are 6 or 12 months
Whatever your SOC 2® needs are, OCD Tech specializes in both types of SOC 2 Reports, and offers SOC 2® Readiness Assessments to help identify what processes and documentation are already in place to meet the SOC 2® standard, and identify and remediate the gaps where they don’t before the audit.
Have a look at our SOC Reports Service Sheet for more information on the SOC 2® services we offer.
