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SOC, or Service Organization Control, reports are a series of auditing reports that provide assurance about the effectiveness of controls at a service organization relevant to the security, availability, processing integrity, confidentiality, and privacy. There are three types of SOC reports: SOC 1, SOC 2, and SOC 3. Each type of report is designed for a different purpose and has its own set of standards.
SOC 1 Report
A SOC 1 report is for organizations whose internal security controls can impact a customer’s financial statements. This report focuses on controls at a service organization that are relevant to an audit of a user entity’s financial statements. The SOC 1 report often applies to payroll, claims, or payment processing companies. SOC 1 reports can assure customers that their financial information is being handled securely.
SOC 2 Report
SOC 2 reports help organizations demonstrate their cloud and data center security controls. This security framework is based on the Trust Services Criteria. Unlike SOC 1, the SOC 2 report focuses on a business’s non-financial reporting controls related to security, availability, processing integrity, confidentiality, and system privacy.
Within SOC 2, there are two types of reports.
SOC 2 Type I report assesses and reports on the design of controls at a specific point in time. It is a snapshot that confirms that the controls are designed suitably.
SOC 2 Type II report goes a step further and not only assesses the design of controls but also their operational effectiveness over a period of time. It helps demonstrate that a company’s controls are appropriately designed and are operating effectively over a period, typically 6 to 12 months.
SOC 3 Report
SOC 3 is a less detailed, publicly sharable version of the SOC 2 Type 2 report. It is a general-use report that provides only the auditor’s opinion on whether the system achieved the trust services criteria, but it needs to include detailed descriptions and testing results. These reports are meant for general audiences who need assurance regarding an organization’s security, availability, confidentiality, processing integrity, or privacy. Organizations on their websites often host them to provide assurance to a wide range of stakeholders.
Each type of SOC report serves a different purpose and is used by different audiences. Depending on the organization’s needs, one type may be more appropriate than the others.
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