Trust is critical for any business relationship. Getting a SOC report helps you build trust with your customers and partners by demonstrating how you'll protect their sensitive customer data while providing transparency into your control environment.
SOC, which stands for System and Organization Controls, was developed by the American Institute of Certified Public Accountants (AICPA). To receive a SOC report, you’ll need to hire a third-party auditor to investigate, document, and assess your internal controls and business practices against the SOC 2 framework.
In this guide, we’ll explain what a SOC report is and what it’s used for, the different types of SOC reports, and the purpose each of them serves.
What is a SOC report? What is it used for?
A SOC report is a formal document that details your organization's practices, protocols, and internal controls to show that the products and services you provide are safe, accurate, and reliable. Securing a SOC report can show your customers, partners, and other stakeholders that you’re following industry best practices to implement appropriate controls for protecting sensitive customer data and proactively address risks.
There are three types of SOC reports: SOC 1, SOC 2, and SOC 3. Each focuses on a different area of business risk and is meant for a specific audience.
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Types of SOC reports
While each of the three types of SOC reports help demonstrate trust and reduce risk, each one has its own purpose.
SOC 1
A SOC 1 report is the foundation of trust in financial reporting. A SOC 1 report will detail your financial reporting practices and ensure that the financial data you provide your customers and partners is accurate. This is important if you provide products and services that could impact your clients’ financial reporting.
SOC 2
A SOC 2 investigated your internal security controls and beyond. A SOC 2 report details the security controls you have in place to protect your data from unauthorized access, inaccuracies, and poor data management practices. If you process, manage, or handle sensitive customer data or offer cloud services, this may be applicable to you.
SOC 3
Much like a SOC 2 report, a SOC 3 report also covers information security. The difference is that a SOC 3 report is designed for public visibility rather than private sharing with customers and partners. Because of this difference, a SOC 3 report is less detailed and will report your organization's security controls more broadly than a SOC 2 report. SOC 3 reports are often used for marketing or to share your information security posture with stakeholders.
Type 1 vs. Type 2 SOC reports
For SOC 1, SOC 2, and SOC 3, there are two options: a Type 1 report or a Type 2 report. A Type 1 SOC report documents your internal controls at a specific point in time, while a Type 2 report documents your internal controls and their performance over a period of time. For Type 2 reports, this period is usually between six to twelve months. Type 2 reports are more thorough and further demonstrate the effectiveness of your controls, but they can also be more expensive and time-consuming to complete compared to Type 1 reports.
Are SOC reports required?
SOC reports aren’t mandatory — no business is legally required to get one. However, your prospects, customers, or partners may expect to see a SOC report before they agree to do business with you. If your products and services handle customer data or impact your customer’s financial reporting integrity, you’ll likely need a SOC report.
Who prepares a SOC report?
SOC reports must be performed by a CPA from an auditing firm that has been accredited by the AICPA. This audit must be done by a third-party outside of your organization. You’ll hire this auditor, they will investigate your operations, and create a document of their findings that determines your SOC compliance.
What’s included in a SOC 2 report?
SOC 2 reports provide an in-depth explanation of your organization’s internal security controls and the steps you’ve taken to prevent data breaches and protect your customer’s resources. Your SOC 2 report will include an assessment of your security controls and how effective they are.
Sections of a SOC 2 report:
When you receive your SOC 2 report, it will be broken into five sections:
- Auditor’s report: The auditor’s determination of whether your organization neets SOC 2 criteria (an “unqualified opinion”) or whether you still have outstanding criteria to meet (a “qualified opinion”).
- Management assertion: Your attestation that your organization has implemented the appropriate SOC 2 controls.
- System description: A description, prepared by your team, of your organization’s infrastructure, operations, and the components of your data management system.
- Applicable Trust Services Criteria and control activities: A table that lists all of the SOC 2 controls relevant to your organization and how you’ve satisfied each requirement.
- Additional appendices: Evidence and documents to support the findings of the SOC 2 report.
Automate your SOC 2 process
If you’re looking to secure a SOC 2 report, it’s important to understand the audit process that leads to a finalized report. The average SOC 2 process takes roughly a year from the moment you start preparing the controls to when you have a completed SOC 2 report in hand. This is because you’ll need to see which controls are missing, set up the proper controls, test them, collect evidence, and then find an auditor. Once you’ve found an auditor, their assessment will take between 4-6 weeks.
However, you can cut this time in half with compliance automation.
With Vanta’s trust management platform, you can streamline your SOC 2 audit. Here’s what an automated SOC 2 process can look like:
- Connect your infrastructure to the Vanta platform with our 200+ built-in integrations.
- Assess your risk holistically from one unified view.
- Identify areas of non-compliance with in-platform notifications.
- Get a checklist of actions to help you make the needed changes.
- Automate evidence collection and centralize all your documents in one place.
- Find a Vanta-vetted auditor within the platform.
- Streamline reviews by giving your auditor the information in your Trust Center.
- Complete your SOC 2 in half the time.
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SOC 2 reporting and documentation
What is a SOC report?
SOC 2 reporting and documentation
What is a SOC report?
Download the checklist
SOC 2 reporting and documentation
Trust is critical for any business relationship. Getting a SOC report helps you build trust with your customers and partners by demonstrating how you'll protect their sensitive customer data while providing transparency into your control environment.
SOC, which stands for System and Organization Controls, was developed by the American Institute of Certified Public Accountants (AICPA). To receive a SOC report, you’ll need to hire a third-party auditor to investigate, document, and assess your internal controls and business practices against the SOC 2 framework.
In this guide, we’ll explain what a SOC report is and what it’s used for, the different types of SOC reports, and the purpose each of them serves.
What is a SOC report? What is it used for?
A SOC report is a formal document that details your organization's practices, protocols, and internal controls to show that the products and services you provide are safe, accurate, and reliable. Securing a SOC report can show your customers, partners, and other stakeholders that you’re following industry best practices to implement appropriate controls for protecting sensitive customer data and proactively address risks.
There are three types of SOC reports: SOC 1, SOC 2, and SOC 3. Each focuses on a different area of business risk and is meant for a specific audience.
{{cta_withimage1="/cta-modules"}}
Types of SOC reports
While each of the three types of SOC reports help demonstrate trust and reduce risk, each one has its own purpose.
SOC 1
A SOC 1 report is the foundation of trust in financial reporting. A SOC 1 report will detail your financial reporting practices and ensure that the financial data you provide your customers and partners is accurate. This is important if you provide products and services that could impact your clients’ financial reporting.
SOC 2
A SOC 2 investigated your internal security controls and beyond. A SOC 2 report details the security controls you have in place to protect your data from unauthorized access, inaccuracies, and poor data management practices. If you process, manage, or handle sensitive customer data or offer cloud services, this may be applicable to you.
SOC 3
Much like a SOC 2 report, a SOC 3 report also covers information security. The difference is that a SOC 3 report is designed for public visibility rather than private sharing with customers and partners. Because of this difference, a SOC 3 report is less detailed and will report your organization's security controls more broadly than a SOC 2 report. SOC 3 reports are often used for marketing or to share your information security posture with stakeholders.
Type 1 vs. Type 2 SOC reports
For SOC 1, SOC 2, and SOC 3, there are two options: a Type 1 report or a Type 2 report. A Type 1 SOC report documents your internal controls at a specific point in time, while a Type 2 report documents your internal controls and their performance over a period of time. For Type 2 reports, this period is usually between six to twelve months. Type 2 reports are more thorough and further demonstrate the effectiveness of your controls, but they can also be more expensive and time-consuming to complete compared to Type 1 reports.
Are SOC reports required?
SOC reports aren’t mandatory — no business is legally required to get one. However, your prospects, customers, or partners may expect to see a SOC report before they agree to do business with you. If your products and services handle customer data or impact your customer’s financial reporting integrity, you’ll likely need a SOC report.
Who prepares a SOC report?
SOC reports must be performed by a CPA from an auditing firm that has been accredited by the AICPA. This audit must be done by a third-party outside of your organization. You’ll hire this auditor, they will investigate your operations, and create a document of their findings that determines your SOC compliance.
What’s included in a SOC 2 report?
SOC 2 reports provide an in-depth explanation of your organization’s internal security controls and the steps you’ve taken to prevent data breaches and protect your customer’s resources. Your SOC 2 report will include an assessment of your security controls and how effective they are.
Sections of a SOC 2 report:
When you receive your SOC 2 report, it will be broken into five sections:
- Auditor’s report: The auditor’s determination of whether your organization neets SOC 2 criteria (an “unqualified opinion”) or whether you still have outstanding criteria to meet (a “qualified opinion”).
- Management assertion: Your attestation that your organization has implemented the appropriate SOC 2 controls.
- System description: A description, prepared by your team, of your organization’s infrastructure, operations, and the components of your data management system.
- Applicable Trust Services Criteria and control activities: A table that lists all of the SOC 2 controls relevant to your organization and how you’ve satisfied each requirement.
- Additional appendices: Evidence and documents to support the findings of the SOC 2 report.
Automate your SOC 2 process
If you’re looking to secure a SOC 2 report, it’s important to understand the audit process that leads to a finalized report. The average SOC 2 process takes roughly a year from the moment you start preparing the controls to when you have a completed SOC 2 report in hand. This is because you’ll need to see which controls are missing, set up the proper controls, test them, collect evidence, and then find an auditor. Once you’ve found an auditor, their assessment will take between 4-6 weeks.
However, you can cut this time in half with compliance automation.
With Vanta’s trust management platform, you can streamline your SOC 2 audit. Here’s what an automated SOC 2 process can look like:
- Connect your infrastructure to the Vanta platform with our 200+ built-in integrations.
- Assess your risk holistically from one unified view.
- Identify areas of non-compliance with in-platform notifications.
- Get a checklist of actions to help you make the needed changes.
- Automate evidence collection and centralize all your documents in one place.
- Find a Vanta-vetted auditor within the platform.
- Streamline reviews by giving your auditor the information in your Trust Center.
- Complete your SOC 2 in half the time.
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Explore more SOC 2 articles
Introduction to SOC 2
Preparing for a SOC 2 audit
SOC 2 reporting and documentation
Streamlining SOC 2 compliance
SOC differences and similarities
Additional SOC 2 resources
Get started with SOC 2
Start your SOC 2 journey with these related resources.
The SOC 2 Compliance Checklist
Simplify and expedite your company’s SOC 2 audit and report process with Vanta. This checklist walks through the SOC 2 attestation process.
Vanta in Action: Compliance Automation
Demonstrating security compliance with a framework like SOC 2, ISO 27001, HIPAA, etc. is not only essential for scaling your business and raising capital, it also builds an important foundation of trust.
