SOC differences and similarities
What is SOC 3?
Trust is crucial in today’s business landscape. As companies and consumers use and create more data, there’s growing concern around how that data is managed. Organizations that handle customer data can mitigate these concerns, earn trust, and prove they’re good data stewards by getting a SOC 3 report.
The SOC standards (SOC 1, SOC 2, and SOC 3) were created by the American Institute of Certified Public Accountants (AICPA) to help organizations protect the cybersecurity and financial integrity of their business. A SOC 3 report focuses on data security and details the systems and processes you have in place to keep customer and consumer data secure while it's being managed by your business.
In this article, we’ll explain what a SOC 3 report is, which organizations get SOC 3, and what you can expect during your SOC 3 audit process.
What is a SOC 3 report?
A SOC 3 report is a document prepared by a third-party auditor that details the security controls you have in place to protect your organizational and customer data. Most often a SOC 3 report is for general use and public visibility. Because it’s intended for public viewing, a SOC 3 report is less detailed and broader compared to a SOC 2 report.
Most often, a SOC 2 and a SOC 3 audit are done at the same time given that they cover the same controls. Both reports will assess your data security based on five categories known as the Trust Services Criteria (TSC). Each TSC category has a list of controls and practices you must meet if that particular category is relevant to your organization. The five TSC are security, privacy, processing integrity, availability, and confidentiality.
The security category of the TSC is mandatory for all SOC 3 reports, while the other four criteria categories should only be included if they apply to your organization. For example, you would want to meet the confidentiality criteria if your organization handles confidential data. During an audit, your auditor will investigate your controls for the relevant TSC and prepare a report that details their findings and assessment.
Who needs a SOC 3?
SOC reports aren’t mandatory by law — no organization needs to a SOC 3 to do business. However, it may be expected if you handle customer or consumer data. Customers may ask to see a SOC 3, but it’s more common for them to ask for a SOC 2 given its more detailed reporting. A SOC 3 may be beneficial if you’re looking to share your security controls publicly, which you can’t do with a SOC 2.
SOC 3 is most common for organizations in the Saas and PaaS industries, for business intelligence analysts, and for businesses that collect data from website visitors. While SOC is a globally recognized standard, it’s used most often in North America.
Why is SOC 3 compliance important?
Given that 48% of American consumers have been the victim of a data breach, it’s more important than ever to show what controls your organization has in place to keep their data safe. While SOC 3 compliance isn’t required by law, it can impact your brand’s trustworthiness by showing how you protect consumer data.
Shareholders and other stakeholders need reassurance as well. According to IBM Security, the average cost of a data breach reached $4.45 million in 2023. A SOC 3 report shows stakeholders what precautions you’re taking to avoid this risk.
Differences between SOC 1, SOC 2, and SOC 3
There are three types of SOC reports: SOC 1, SOC 2, and SOC 3. This next section will look at the differences between these reports:
SOC 1 was the first SOC standard to be developed. When it was created it was called SAS 70 and was later renamed to SOC 1 when SSAE 16 was created. Its purpose is to assess and detail an organization’s financial controls to ensure they follow the proper protocols to track and report their financials.
SOC 2 is similar to SOC 3 because both reports provide insight into an organization’s cybersecurity controls. SOC 2 and SOC 3 have the same audit process and cover the same controls.
A major difference between them is that SOC 2 is meant for private use. A SOC 2 is intended to be viewed by internal stakeholders, customers, prospects, and partners, while a SOC 3 is intended for a public audience. Because of this distinction, SOC 2 reports are more detailed and specific while SOC 3 reports are more broad and less technical.
A SOC 3 report is the only type of SOC report meant for general use and public viewing. While the other SOC reports are confidential, SOC 3 reports can be used in your marketing campaigns, distributed to shareholders, and posted to your website to help earn trust among consumers without revealing private information about your security protocols.
SOC 3 audit process
To get a SOC 3 report, you’ll need to hire a third-party auditor from an AICPA-accredited firm to perform an audit of your controls. While your audit may vary based on the products and services you provide, your SOC 3 audit process will typically include these steps:
- Determining scope: Every organization seeking SOC 3 compliance must implement all of the controls from the security category, but you’ll also need to determine which of the other TSC need to be included in your scope as well.
- Preparation: After determining which TSC you need to include, you’ll have to implement each of the controls for the applicable categories. You’ll also need to prepare documentation and collect evidence of your compliance to give to your auditor.
- Readiness assessment (optional): A readiness assessment is a preliminary review of your SOC 3 controls to see if you meet the requirements ahead of your formal audit. It can be performed internally or by your auditor.
- Formal audit: Your auditor will thoroughly investigate your security controls against the relevant TSC and document their findings.
- Report: Your auditor will prepare your SOC 3 report, assessment against SOC 3 criteria, and provide a brief description of your SOC 3 controls.
Best practices for achieving SOC 3 compliance
Working toward SOC 3 compliance can be a time-consuming and complex process. The average SOC process takes roughly a year to complete from the moment you start preparing the controls to when you have a completed SOC report in hand.
Here are a few best practices that could make completing your SOC 3 audit easier:
Establish a plan for continued compliance
SOC 3 compliance isn’t a one-time project. Your SOC 3 report will be valid for one year after you’ve successfully completed your audit. Set up a reminder for your team to begin the audit process again at the six-month mark so your current report doesn’t expire before you have a new one. Establish practices and tools to retain your SOC 3 controls so that future audits are quicker and easier.
Get your SOC 2 and SOC 3 reports at the same time
A SOC 3 audit follows all the same steps as a SOC 2 audit — the only difference is the final report. Because these reports are so similar, it’s common for organizations to undergo a SOC 2 audit and SOC 3 audit at the same time. You’ll receive two reports for separate uses, but only have to go through one audit.