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System and organization control or SOC 2 is an auditing method planned to ensure that vendor (third-party service provider), can manage data to protect the privacy of stakeholders. Service provider performs a set of processes to get control on stakeholder policies and procedures. Controls are achieved by TCB Trust Services Principles and include security, availability, processing integrity, confidentiality, and privacy. These security controls are used by organizations to protect and control customer’s data.
However, SOC 2’s original standard was known as SAS 70 which was replaced by SOC 2 in 2011. SOC 2 is developed by the American Institute of Certificate Public Accountants.
Related: NOC vs SOC
What is SOC 2?
SOC 2 defines the criteria to manage data of customers by using five service principles which is also known as Trust Service Principles.
- Availability: This feature confirms accessibility of the system.
- Confidentiality: It provides protection of information.
- Security: It ensures and addresses protection against unauthorized access.
- Privacy: It tracks the method through which personal information is collected by any third-party.
- Processing Integrity: System able to deliver the data without alteration and without any change.
SOC 2 auditor starts with looking at any organization’s principles and procedures, how the controls are carried out on a day-to-day basis. Auditors can investigate the live system/set-up. They want to connect to the organization’s cloud services, check the access and access mechanisms, check firewalls and networking equipment.
SOC 2 Report Types
There are two types of SOC 2 reports:
SOC 2 Type 1 – Examines security controls as on date specifically/at a specific point in time.
SOC 2 Type 2 – Evaluates those same controls over a certain period.
Duration
SOC 2 Type 1 is generated post gap assessment. It would take a few weeks or maximum 3 months to generate readiness assessment/gaps in any organization’s live system. Advantages of creating SOC 2 report is to get the trustworthiness of stakeholders.
SOC 2 Type 2, creation of SOC 2 Type 2 can take up to 1 year to 2 years. Minimum time to analyze and test the system is somewhere around 6 months.
Cost
SOC 2 audit for Type 1 is less costly since auditors need minimal data to identify and determine the compliance of a service organization. Less number of staff or internal team would be involved during Type 1 audit hence not much expensive.
For SOC 2 Type 2 apparently, more staff is required to get inputs. For example, a Type 2 auditor can ask for a list of all new Security appliances which have been implemented in the last 3 months. Then, the concerned team will share requested data accordingly. General cost for SOC 2 Type 1 and Type 2
SOC 2 Type 1: $25,000-$30,000
SOC 2 Type 2: $25,000-$45,000
Reliability
SOC 2 Type 1 and Type 2 both are reliable to achieve a complaint certificate. However, SOC 2 Type 2 provides more reliability because it is conducted for 6 months to 1 year. Deep analysis of all 5 Trust Service Principles is performed in a live system.
Hence SOC 2 Type 1 provides more reliability than SOC 2 Type 2.
Assurance
SOC 2 Type 2 compliance report gives higher assurance than SOC 2 Type 1.
But why……?
Companies must pass a thorough scrutiny during SOC 2 type 2 report analysis to achieve best output of internal control and policies. Auditors take more than 6 months or year to identify gaps in the system. Also, the Auditor checks if the relevant data is still followed by the company or not. Effectiveness of data must be checked.
Scope
SOC 2 Type 2 covers a wider area of control and objectives than SOC 2 Type 1. Although compared with SOC 2 Type 1, it can require weighty speculation and investments not only in terms of money but also working hours.
Related: NOC Engineer Interview Questions
SOC 2 Type 1 vs Type 2: Differences
| SOC 2 | ||
| Feature | TYPE 1 | TYPE 2 |
| Definition | Examines security controls at a specific point in time. | Evaluates controls and objectives over a certain period |
| Duration | Few weeks to few months | Few months to 2 years |
| Reliable | Moderate Reliable | Highly Reliable |
| Assurance | Provide assurance according to Industry Pattern | Provides high assurance and analysis in Report |
| Scope | Covers 5 criteria of Trust Service Principle by using basic analysis | Covers 5 criteria of Trust Service Principle with deep investigation |
| Cost | Involves minimal cost | Costly as more number of staff is required |
| Trust Service Principles | Yes | Yes |
| Staff | Less number of staff is required, Auditor and few internal team member of organisation | Team size should be large, Auditor and some other teams who can work with Auditor during 1year or 2 year of tenure |
| Preference | Type I report is peferred the most as it provides complaince report in few weeks and provide certificate accordingly | Type II is little bit less preferred in organization as it takes max 1 year analysis to provide SOC 2 compliance certificate. |
| Market Value | Moderate | Highly Valuable |
| Efforts | Average | Constant |
SOC 2 Type 1 and Type 2: Similarities
SOC 2 Type 1 and Type 2 have some common points as well.
- Type 1 and Type 2 have followed 5 Trust services criteria to control the organization’s data.
- Both Type 1 and Type 2 are not mandatory to follow by any organization. Perusing/following compliance to SOC 2 whether type 1 or type 2 is intentional. Companies are pursuing SOC 2 reports to get more business to provide compliance certificates to stakeholder which established trust between two parties.
- Type 1 and Type 2 are following the Control Framework to generate SOC 2 reports. Control Framework further divided into –
Administrative🡺 Policies and Procedures in system/organization
Logical🡺 Login Authorization, authentications
Technical🡺 Covers Firewall, Patching, Anti-virus updates
- Type 1 and Type 2 both have followed a documentation approach of every scope and objective along with gap analysis assessment.
- Auditor requires evidence of control and scope or objective in both cases.
Which One to Choose?
Organization with low budget and new in market should opt SOC 2 type 1 report. Gap analysis reports can help any organization to identify failed controls in the service provider. However, big sharks or organizations can go for SOC 2 type2 reports as they have plenty of money to spend on the whole audit process.
In short, SOC 2 Complaint Certificate increases trust and reputation in industry to gain more business contracts.
ABOUT THE AUTHOR
I am here to share my knowledge and experience in the field of networking with the goal being – “The more you share, the more you learn.”
I am a biotechnologist by qualification and a Network Enthusiast by interest. I developed interest in networking being in the company of a passionate Network Professional, my husband.
I am a strong believer of the fact that “learning is a constant process of discovering yourself.”
– Rashmi Bhardwaj (Author/Editor)
