What's the Difference Between SOC 2 Type I and SOC 2 Type II?

What’s the Difference Between SOC 2 Type I and SOC 2 Type II?

What is a SOC 2 Audit?

A SOC 2 audit, or Service Organization Control 2, is an audit of a service organization’s non-financial reporting controls as they relate to the Trust Services Criteria – the security, availability, processing integrity, confidentiality, and privacy of a system. A SOC 2 audit report provides user entities with reasonable assurance and peace of mind that the non-financial reporting controls at a service organization are suitably designed, in place, and appropriately protecting sensitive client data. There are two types of SOC 2 audit reports – SOC 2 Type I and SOC 2 Type II.

SOC 2 Type I vs. SOC 2 Type II

A SOC 2 Type I and SOC 2 Type II both report on the non-financial reporting controls and processes at a service organization as they relate to the Trust Services Criteria. There are many other similarities between SOC 2 Type I and SOC 2 Type II reports, but the key difference is that a SOC 2 Type I report is an attestation of controls at a service organization at a specific point in time, whereas a SOC 2 Type II report is an attestation of controls at a service organization over a minimum six-month period. The SOC 2 Type I reports on the description of controls provided by management of the service organization and attests that the controls are suitably designed and implemented. The SOC 2 Type II reports on the description of controls provided by management of the service organization, attests that the controls are suitably designed and implemented, and attests to the operating effectiveness of the controls.

As a CPA firm, we advise clients who are engaging in a SOC 2 audit for the first time to begin with a Type I and move on to a Type II the following audit period. This gives service organizations a good starting point and more time to focus on the description of their system, allowing them to mature their environment over time.

Many organizations are required to undergo a third-party SOC 2 audit. If you have questions about which type of SOC report you need or want help demonstrating to your clients your commitment to security and compliance, contact us today.

Video Transcript

There are two types of SOC 2 audit reports: Type I and Type II. Often times, if you’re doing a SOC 2 audit report for the first time, you’ll start with a Type I. It’s an engagement where we, as an auditor, are reporting on management’s description of the controls that are placed into operation. We will also provide an opinion on the suitability of the design of those controls.

A Type II report for a SOC 2 audit includes the exact same sections as I just mentioned in the Type I, but there’s an additional section that talks about the operating effectiveness of those controls that you’ve put into place. What the auditor does in a Type II report is perform tests of operating effectiveness to validate that the controls are in place and operating effectively. It’s important to understand the distinction between the two types of reports because your clients may ask for a Type II and you need to be aware of what the difference is between the SOC 2 Type I vs. SOC 2 Type II. If you are just beginning the SOC 2 audit process, you may consider beginning with the Type I so that we can spend more time focused on your description of the system that you have in place at your service organization, and whether or not those controls are suitably designed before moving onto testing of operating effectiveness in the SOC 2 Type II audit report.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *