Decision guide
SOC 1 vs SOC 2
Both are AICPA attestation reports issued by a CPA firm, but they answer different questions: SOC 1 covers the controls that affect your clients' financial reporting; SOC 2 covers how you protect their data.
| Dimension | SOC 1 | SOC 2 |
|---|---|---|
| What it reports on | Controls relevant to clients' internal control over financial reporting (ICFR) | Controls against the Trust Services Criteria: security, availability, processing integrity, confidentiality, privacy |
| Standard | SSAE 18 (ISAE 3402 internationally) | SSAE 18 / AICPA Trust Services Criteria |
| Who asks for it | Clients' finance teams and their financial auditors | Clients' security, procurement and risk teams |
| Typical buyer | Payroll, loan and claims servicers, data centres, fintech affecting client financials | SaaS, IT/ITeS, cloud and fintech handling customer data |
| Report types | Type I (design) and Type II (operating effectiveness) | Type I (design) and Type II (operating effectiveness) |
| Issued by | An independent licensed CPA firm | An independent licensed CPA firm |
| Report access | Restricted-use (service org, user entities, their auditors) | Restricted-use (service org, user entities, their auditors) |
When SOC 1 is the right report
Choose SOC 1 when your service could affect your clients’ financial statements — payroll and benefits processing, loan or claims servicing, data centres, or a platform that handles financial transactions on a client’s behalf. SOC 1 gives their auditors assurance over the controls that feed their financial reporting.
When SOC 2 leads
Choose SOC 2 when customers care about how you secure and handle their data — the usual case for SaaS, cloud and IT services. It reports against the Trust Services Criteria (security is mandatory; availability, processing integrity, confidentiality and privacy are added as relevant) and is what procurement and security teams ask for.
When you need both
- Map financial-reporting-relevant controls to SOC 1 objectives; map data-protection controls to the SOC 2 Trust Services Criteria.
- Reuse shared evidence (access control, change management, monitoring) once and report it into each engagement.
- Prefer Type II for both where possible — it tests that controls actually operated over a period, which carries more weight with clients.
- Align audit windows so remediation does not conflict.
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