SOC 2 is an auditing standard that evaluates the internal controls of a service organization, specifically how it handles customer data based on security, availability, processing integrity, confidentiality, and privacy.

Companies that handle sensitive data—especially technology, SaaS, and cloud service providers—need SOC 2 compliance to build trust with clients and meet contractual requirements, particularly if they have US-based clients

The five trust service criteria are: security, availability, processing integrity, confidentiality, and privacy. These criteria guide how your data is managed and protected.

Typically, achieving SOC 2 compliance can take anywhere from 6 months to a year, depending on the current state of your systems and security practices.

A SOC 2 Type I report evaluates the design of your controls at a specific point in time, while a SOC 2 Type II report evaluates the operating effectiveness of those controls over a longer period (usually 6 to 12 months).

The service organisation control, sometimes referred to as system and organisational control (SOC) standards has been around for decades. Their earlier use was driven by financial reporting objectives, later termed “SOC 1”. That’s where third parties would rely on IT systems or services, and that would impact their financial statement audits or other financial interests like in asset management or superannuation. 

As reliance on third-party services evolved with the rise in software as a service companies, these reports naturally evolved to being used for assurance over those third-party services even when no direct financial objectives were involved. The Trust Services Criteria were then introduced to better align with the modern needs of third parties that were reliant on security, availability, confidentiality, processing integrity and privacy. This became “SOC 2” to differentiate from the earlier SOC 1 purpose.

Both ISO 27001 and SOC 2 (Type 2) focus on information security, but they differ in structure and scope. ISO 27001 is a global standard that requires organizations to establish an Information Security Management System (ISMS) with ongoing audits, while SOC 2 (Type 2) evaluates specific controls over a defined period (typically 6 to 12 months). In terms of control overlap, around 60-80% of the controls are similar, with both frameworks covering key areas like access control, incident management, and data protection. However, SOC 2 is more flexible, focusing on the five trust service criteria, whereas ISO 27001 provides a more structured approach to risk management.