What's The Difference Between SOC 1 Type I and SOC 1 Type II?

The Difference Between SOC 1 Type I and SOC 1 Type II

How Do You Know the Difference Between SOC 1 Type I and SOC 1 Type II?

When you begin thinking about pursuing SOC 1 compliance, you’ll have the option of choosing a Type I or Type II audit. While both of these audits assess a service organization’s controls and processes that may impact their clients’ internal control over financial reporting (ICFR), the biggest difference between SOC 1 Type I and SOC 1 Type II is the audit period. For example, if you decide to undergo a SOC 1 Type I audit, an auditor will assess your controls and processes and their impact over user entities’ ICFR for a specific moment in time. On the other hand, if your organization pursues SOC 1 Type II compliance, an auditor will assess your controls and processes and their impact over user entities’ ICFR over a minimum six-month period.

Do I Need to Start with a SOC 1 Type I or SOC 1 Type II Audit?

Determining whether you want to begin your SOC 1 compliance journey with either a Type I or Type II audit depends on your organization’s needs and what is required of you. At KirkpatrickPrice, we generally recommend that service organizations begin with a SOC 1 Type I before moving onto a SOC 1 Type II. Why? Because we want our clients to get the most out of their audit, which means that we want to set them up for success by preparing them with the tools they need to get through an information security audit. To do this, we offer a streamlined Type I process that combines our gap analysis service with a remediation project plan, resulting in the Type I audit report being delivered within weeks of the engagement kick off. By beginning with a SOC 1 Type I using this streamlined approach, service organizations can then pursue their Type II compliance with a better understanding of the audit process and more clear expectations of how a SOC 1 audit works.

Has your organization been asked to demonstrate SOC 1 compliance? Are you still unsure if you need a Type I or Type II audit? Contact us today to learn how KirkpatrickPrice can help you get started on your compliance efforts.

More SOC 1 Resources

Understanding Your SOC 1 Report Video Series

SOC 1 Compliance Checklist: Are You Prepared for an Audit?

How to Read Your Vendors SOC 1 or SOC 2 Report?

 

Video Transcription

There are two types of SOC 1 reports: there’s a SOC 1 Type I report, and there’s a SOC 1 Type II report. The SOC 1 Type I report is an opinion on the fairness of the presentation of the description provided by management of the service organization, and there’s also an opinion on the suitability of the design of the controls. We also validate that the controls are in place as of a particular date. The SOC 1 Type II report has the exact same sections that I just mentioned for the Type I, but it adds on an additional section, which is testing performed by the service auditor on the operating effectiveness of the controls that are in place over a period of time. So, the Type I report cares about controls that are in place as of a particular date, whereas the Type II report cares about the operating effectiveness of those controls over a period of time. If you need help talking to an auditor about what report is right for you and what your audit period should be for your report, please contact one of our Information Security Specialists today.

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