A Complete Guide to Comparing SOC2 Type 1 vs Type 2

A Complete Guide to Comparing SOC2 Type 1 vs Type 2

Table of Contents:

1. Introduction to SOC2
2. Understanding SOC2 Type One Report
3. Advantages of SOC2 Type One Report
4. Steps to Obtain a SOC2 Type One Report
5. Understanding SOC2 Type Two Report
6. Advantages of SOC2 Type Two Report
7. Steps to Obtain a SOC2 Type Two Report
8. Differences Between SOC2 Type One and SOC2 Type Two Reports
9. Scope and Assessment Period
10. Cost and Ways to Reduce It
11. Importance of Automation in SOC2 Compliance

Article:

Introduction to SOC2

When it comes to information security compliance, SOC2 is considered the gold standard. However, many people are unaware that there are actually two types of SOC2 reports, and even those who are aware might not fully understand their differences and which one is best suited for their organization. In this article, we will dive into the details of SOC2, its two types (type one and type two), and provide insights into the advantages of each report.

Understanding SOC2 Type One Report

A SOC2 type one report is a detailed assessment of your organization's system, focusing on the design of internal controls at a specific point in time. It provides evidence of the functionality of these controls and whether they are preventive, detective, or corrective. In simpler terms, think of it as having all the right ingredients in place for a burrito. The SOC2 type one report confirms that you have the necessary controls established.

Advantages of SOC2 Type One Report

A SOC2 type one report offers numerous advantages, both for external stakeholders and your organization. For external stakeholders, it demonstrates your commitment to data security and shows that you are on your way to becoming SOC2 compliant. Internally, it provides Insight into the organizational controls needed to achieve SOC2 type two compliance, ensuring a practical understanding of what auditors look for in the next stage.

Steps to Obtain a SOC2 Type One Report

To obtain a SOC2 type one report, You need to follow three essential steps:

1. Implementation: Outline the trust criteria and controls you want to implement.
2. Readiness Assessment: Review all documents and processes, identifying any gaps and fixing them.
3. Auditor Selection and Certification: Choose an auditor and submit all collected controls for external review.

Understanding SOC2 Type Two Report

A SOC2 type two report is similar to a type one report in terms of assessing your organization's system design of internal controls. The key difference is that a type two report is a continuous assessment conducted over an extended period, typically ranging from 3 to 12 months. Instead of confirming the presence of controls like the type one report, it verifies whether you consistently follow these controls.

Advantages of SOC2 Type Two Report

A successful SOC2 type two report indicates that you are using best-in-class policies and processes to secure customer data, leading to better overall security. Additionally, having a SOC2 type two report can shorten your sales cycle by bypassing lengthy security questionnaires, giving you a competitive edge over noncompliant peers.

Steps to Obtain a SOC2 Type Two Report

Obtaining a SOC2 type two report follows a process similar to that of a type one report, with the addition of a type one report beforehand being advantageous. The steps include implementation, readiness assessment, auditor selection, and the audit itself. While a type two report takes longer due to its extended observation period, the benefits make it worthwhile.

Differences Between SOC2 Type One and SOC2 Type Two Reports

There are several key differences between SOC2 type one and type two reports:

1. Scope: A type one report is a point-in-time assessment, while a type two report provides a more in-depth and continuous monitoring of controls.
2. Assessment Period: A type two report takes longer, lasting between 3 to 12 months, compared to the shorter observation period of a type one report.
3. Cost: There is a significant difference in cost between the two reports, with a type two report typically ranging from $20,000 to $50,000, higher than the cost of a type one report.

Cost and Ways to Reduce It

Although the cost of obtaining a SOC2 report can be high, there are ways to reduce it. One effective method is utilizing compliance automation software like Sprinto, which can streamline the compliance process, reduce manual effort, and ultimately result in lower costs and quicker report delivery. By adopting automation, companies have obtained SOC2 type one and type two reports in as little as 4 to 6 weeks for as low as $10,000.

Importance of Automation in SOC2 Compliance

Automation plays a crucial role in SOC2 compliance as it simplifies and speeds up the process. By reducing manual effort and ensuring accuracy, compliance automation software enables organizations to achieve SOC2 compliance more efficiently. Moreover, it allows companies to focus on their Core business while maintaining robust data security practices.

Highlight: SOC2 Compliance Made Easy with Automation

FAQ:

Q: What is the difference between SOC2 type one and type two reports? A: The main difference lies in the assessment scope and period. A SOC2 type one report is a point-in-time assessment, while a SOC2 type two report involves continuous monitoring over an extended period, typically 3 to 12 months.

Q: How much does it cost to obtain a SOC2 report? A: The cost varies depending on the type of report. A SOC2 type one report can range from $8,000 to $30,000, while a SOC2 type two report is typically priced between $20,000 and $50,000.

Q: How can I reduce the cost of getting a SOC2 report? A: Utilizing compliance automation software, such as Sprinto, can significantly reduce costs by streamlining the compliance process, minimizing manual effort, and ensuring faster report delivery.

Q: What are the advantages of having a SOC2 type two report? A: A SOC2 type two report demonstrates better overall security, as it confirms the usage of best-in-class policies and processes. It also shortens the sales cycle by avoiding lengthy security questionnaires and gives you a competitive edge over noncompliant competitors.