Trust is essential for customer retention and business success, but the type of assurance stakeholders expect can vary. One of the most common ways organizations demonstrate trust is through a SOC 2 report, which documents an independent CPA's opinion on the design and operating effectiveness of your controls against the Trust Services Criteria. On the other hand, SOC 1 reports take a different approach, focusing on controls relevant to customers' financial reporting.
Getting a SOC 1 or a SOC 2 report can help you provide that assurance, but which one aligns better with your business and customer expectations? This guide covers the differences between SOC 1 and SOC 2 reports to help you determine if you should get either or both
Overview of SOC reports
System and Organization Controls (SOC) reports are unbiased third-party attestations that evaluate an organization's internal controls relevant to security, data availability and processing, governance, and financial reporting practices, depending on the type of report. The American Institute of Certified Public Accountants (AICPA) developed the SOC framework to provide independent assurance over a service organization's controls - evaluated against defined control objectives (SOC 1) or the Trust Services Criteria (SOC 2), depending on the report type.
There are different types of SOC reports, each designed for a unique purpose. The two most common are SOC 1 and SOC 2, which differ in what they evaluate and the audiences they serve.
{{cta_withimage1="/cta-blocks"}} | SOC 2 compliance checklist
What’s the difference between SOC 1 and SOC 2
The main difference between a SOC 1 and a SOC 2 report is what they evaluate and who they’re designed for.
SOC 1 vs SOC 2: What they evaluate
A SOC 1 examination evaluates controls at a service organization that are likely to be relevant to user entities' ICFR, while the resulting attestation report documents the suitability of the design and the operating effectiveness (in case of Type 2) of controls to meet the control objectives defined by management. It provides independent assurance over the design, and where applicable, the operating effectiveness of those controls.
A SOC 2 attestation evaluates controls relevant to one or more of the five Trust Services Criteria. The resulting attestation report provides independent assurance that those controls align with one or more of SOC 2’s five Trust Services Criteria (TSC), depending on the scope of the engagement: Security, Availability, Processing Integrity, Confidentiality, and Privacy. The Security TSC is mandatory for every SOC 2 report. The rest are included in your audit scope only if they apply to the products, services, or the data you process. Where applicable, a SOC 2 report also validates the effectiveness of your controls over an observation period.
SOC 1 vs SOC 2: Who they’re designed for
A SOC 1 report is designed for organizations whose services can impact user entities' ICFR. Examples include payroll providers, payment processors, benefits administrators, and other service organizations whose controls can influence a client’s financial audit.
A SOC 2 report, on the other hand, is the standard choice for organizations that handle and protect customer data. It’s a common expectation for organizations such as cloud service providers, SaaS startups, managed service providers, and healthtech vendors. Often, the compliance expectation also extends to an organization’s supply chain partners that access sensitive data and expand the risk landscape.
Some organizations need both reports. For instance, a fintech startup may need a SOC 1 report because it processes financial transactions, and a SOC 2 report because it maintains sensitive customer billing records.
SOC 1 and SOC 2 reports are often requested by buyers in North America. Organizations whose services affect financial reporting and handle sensitive customer data may need both reports, while SOC 2 is also well-recognized in international markets.
The following table summarizes the key SOC 1 and SOC 2 differences:
*Note: Both SOC 1 and SOC 2 reports contain detailed audit findings and are intended for a limited audience. If you want to publicly share your attestation on your website, you would issue a SOC 3 report, which is a general-use report derived from a SOC 2 engagement.
SOC Type 1 vs SOC Type 2 report
Both SOC 1 and SOC 2 are available as Type 1 and Type 2 reports. Each serves a different purpose.
A SOC Type 1 report evaluates the suitability of the design of your controls as of a specified date. It does not test whether the controls operated effectively over time.
A SOC Type 2 report covers an observation period, usually three to twelve months, during which the auditor tests both the design and operating effectiveness of your controls. The resulting report documents the design of your controls and the tests performed, including the results and any exceptions identified during the observation period.
“
The preparation process also differs between SOC 1 Type 2 and SOC 2 Type 2 audits. The main difference is how the control objectives are defined. SOC 2 measures controls against a fixed framework, the TSC, so organizations map their controls to established criteria. SOC 1 has no equivalent standard list. Instead, organizations define control objectives based on how their services affect clients’ financial reporting, making SOC 1 scoping more bespoke. The evidence also tends to differ: SOC 1 skews toward transaction accuracy and controls relevant to financial reporting, while SOC 2 evidence typically centers on security and operational controls.”
How to determine if you need a SOC 1 or SOC 2 report
To determine what type of SOC report your organization needs, look at the services you provide and how your customers use them—whether they rely on you for financial reporting or data security.
“
The right report ultimately depends on three factors: your services, the data you handle, and your customers’ requirements. The services you provide determine whether SOC 1 applies, the data you handle determines whether SOC 2 applies, and customer requirements often determine when you pursue either report. Overall, services and data determine which report you need, while customer demand determines when you need it.”
If your services affect another organization’s financial reporting or internal controls and you also handle sensitive customer data, you may benefit from both SOC 1 and SOC 2 reports. Fintech and digital banking are clear examples because they process transactions and store account data. Payroll, HR, and billing platforms can face similar risks because they affect financial reporting while also handling personal information. When a service creates financial-reporting risk and data-security risk at once, a single report often leaves a gap that buyers will ask about.
How to get a SOC 1 or SOC 2 report
Getting a SOC 1 or SOC 2 report starts with determining your audit scope, implementing the necessary controls, and maintaining documentation supporting them. For a Type 2 report, you also need evidence to demonstrate operational effectiveness. Next, you undergo the audit to get your attestation report.
The compliance process takes anywhere from several months to over a year, depending on your existing readiness and if you use a leading compliance automation solution.
With a top agentic trust platform like Vanta, you can reduce the time and manual effort needed to become SOC compliant. Automate workflows with the Vanta AI Agent, fill compliance gaps with AI-powered remediation, and use ongoing oversight to maintain your attestation.
Vanta’s SOC 2 software offers notable features to support SOC 2 prep and audits:
- Customizable SOC 2 scoping
- Automated evidence collection
- 1,400+ automated tests, hourly control monitoring, and 400+ integrations
- Smart policy builder to create and maintain SOC 2 documentation
- Ownership and accountability tracking for control responsibilities
- Risk assessment workflows
- Vanta’s partner network of 100+ trusted auditors
- Access to the Vanta Trust Center to build trust with customers and auditors via a shareable portal
Schedule a custom demo to closely see how Vanta supports SOC compliance.
{{cta_simple1="/cta-blocks"}} | SOC 2 product page
SOC differences and similarities
SOC 1 vs. SOC 2: Which one do you need?
SOC differences and similarities
SOC 1 vs. SOC 2: Which one do you need?
Download the checklist
Looking to automate SOC 2 audit prep?
Trust is essential for customer retention and business success, but the type of assurance stakeholders expect can vary. One of the most common ways organizations demonstrate trust is through a SOC 2 report, which documents an independent CPA's opinion on the design and operating effectiveness of your controls against the Trust Services Criteria. On the other hand, SOC 1 reports take a different approach, focusing on controls relevant to customers' financial reporting.
Getting a SOC 1 or a SOC 2 report can help you provide that assurance, but which one aligns better with your business and customer expectations? This guide covers the differences between SOC 1 and SOC 2 reports to help you determine if you should get either or both
Overview of SOC reports
System and Organization Controls (SOC) reports are unbiased third-party attestations that evaluate an organization's internal controls relevant to security, data availability and processing, governance, and financial reporting practices, depending on the type of report. The American Institute of Certified Public Accountants (AICPA) developed the SOC framework to provide independent assurance over a service organization's controls - evaluated against defined control objectives (SOC 1) or the Trust Services Criteria (SOC 2), depending on the report type.
There are different types of SOC reports, each designed for a unique purpose. The two most common are SOC 1 and SOC 2, which differ in what they evaluate and the audiences they serve.
{{cta_withimage1="/cta-blocks"}} | SOC 2 compliance checklist
What’s the difference between SOC 1 and SOC 2
The main difference between a SOC 1 and a SOC 2 report is what they evaluate and who they’re designed for.
SOC 1 vs SOC 2: What they evaluate
A SOC 1 examination evaluates controls at a service organization that are likely to be relevant to user entities' ICFR, while the resulting attestation report documents the suitability of the design and the operating effectiveness (in case of Type 2) of controls to meet the control objectives defined by management. It provides independent assurance over the design, and where applicable, the operating effectiveness of those controls.
A SOC 2 attestation evaluates controls relevant to one or more of the five Trust Services Criteria. The resulting attestation report provides independent assurance that those controls align with one or more of SOC 2’s five Trust Services Criteria (TSC), depending on the scope of the engagement: Security, Availability, Processing Integrity, Confidentiality, and Privacy. The Security TSC is mandatory for every SOC 2 report. The rest are included in your audit scope only if they apply to the products, services, or the data you process. Where applicable, a SOC 2 report also validates the effectiveness of your controls over an observation period.
SOC 1 vs SOC 2: Who they’re designed for
A SOC 1 report is designed for organizations whose services can impact user entities' ICFR. Examples include payroll providers, payment processors, benefits administrators, and other service organizations whose controls can influence a client’s financial audit.
A SOC 2 report, on the other hand, is the standard choice for organizations that handle and protect customer data. It’s a common expectation for organizations such as cloud service providers, SaaS startups, managed service providers, and healthtech vendors. Often, the compliance expectation also extends to an organization’s supply chain partners that access sensitive data and expand the risk landscape.
Some organizations need both reports. For instance, a fintech startup may need a SOC 1 report because it processes financial transactions, and a SOC 2 report because it maintains sensitive customer billing records.
SOC 1 and SOC 2 reports are often requested by buyers in North America. Organizations whose services affect financial reporting and handle sensitive customer data may need both reports, while SOC 2 is also well-recognized in international markets.
The following table summarizes the key SOC 1 and SOC 2 differences:
*Note: Both SOC 1 and SOC 2 reports contain detailed audit findings and are intended for a limited audience. If you want to publicly share your attestation on your website, you would issue a SOC 3 report, which is a general-use report derived from a SOC 2 engagement.
SOC Type 1 vs SOC Type 2 report
Both SOC 1 and SOC 2 are available as Type 1 and Type 2 reports. Each serves a different purpose.
A SOC Type 1 report evaluates the suitability of the design of your controls as of a specified date. It does not test whether the controls operated effectively over time.
A SOC Type 2 report covers an observation period, usually three to twelve months, during which the auditor tests both the design and operating effectiveness of your controls. The resulting report documents the design of your controls and the tests performed, including the results and any exceptions identified during the observation period.
“
The preparation process also differs between SOC 1 Type 2 and SOC 2 Type 2 audits. The main difference is how the control objectives are defined. SOC 2 measures controls against a fixed framework, the TSC, so organizations map their controls to established criteria. SOC 1 has no equivalent standard list. Instead, organizations define control objectives based on how their services affect clients’ financial reporting, making SOC 1 scoping more bespoke. The evidence also tends to differ: SOC 1 skews toward transaction accuracy and controls relevant to financial reporting, while SOC 2 evidence typically centers on security and operational controls.”
How to determine if you need a SOC 1 or SOC 2 report
To determine what type of SOC report your organization needs, look at the services you provide and how your customers use them—whether they rely on you for financial reporting or data security.
“
The right report ultimately depends on three factors: your services, the data you handle, and your customers’ requirements. The services you provide determine whether SOC 1 applies, the data you handle determines whether SOC 2 applies, and customer requirements often determine when you pursue either report. Overall, services and data determine which report you need, while customer demand determines when you need it.”
If your services affect another organization’s financial reporting or internal controls and you also handle sensitive customer data, you may benefit from both SOC 1 and SOC 2 reports. Fintech and digital banking are clear examples because they process transactions and store account data. Payroll, HR, and billing platforms can face similar risks because they affect financial reporting while also handling personal information. When a service creates financial-reporting risk and data-security risk at once, a single report often leaves a gap that buyers will ask about.
How to get a SOC 1 or SOC 2 report
Getting a SOC 1 or SOC 2 report starts with determining your audit scope, implementing the necessary controls, and maintaining documentation supporting them. For a Type 2 report, you also need evidence to demonstrate operational effectiveness. Next, you undergo the audit to get your attestation report.
The compliance process takes anywhere from several months to over a year, depending on your existing readiness and if you use a leading compliance automation solution.
With a top agentic trust platform like Vanta, you can reduce the time and manual effort needed to become SOC compliant. Automate workflows with the Vanta AI Agent, fill compliance gaps with AI-powered remediation, and use ongoing oversight to maintain your attestation.
Vanta’s SOC 2 software offers notable features to support SOC 2 prep and audits:
- Customizable SOC 2 scoping
- Automated evidence collection
- 1,400+ automated tests, hourly control monitoring, and 400+ integrations
- Smart policy builder to create and maintain SOC 2 documentation
- Ownership and accountability tracking for control responsibilities
- Risk assessment workflows
- Vanta’s partner network of 100+ trusted auditors
- Access to the Vanta Trust Center to build trust with customers and auditors via a shareable portal
Schedule a custom demo to closely see how Vanta supports SOC compliance.
{{cta_simple1="/cta-blocks"}} | SOC 2 product page
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Streamlining SOC 2 compliance
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