SOC 2 reporting and documentation
What is SOC 2 Type 1?
There are two different types of SOC 2 reports: SOC 2 Type 1 and SOC 2 Type 2. If you’re working toward SOC 2 compliance, you’ll need to determine which type of SOC 2 report is right for you.
A SOC 2 Type 1 report will assess your controls and demonstrate your information security posture at a single point in time, making it less complex and time consuming than a SOC 2 Type 2 report. In this article, we’ll cover what a SOC 2 Type 1 report is, its benefits, and share some tips to help you prepare for your SOC 2 Type 1 audit.
SOC 2 Type 1 vs. SOC 2 Type 2
A SOC 2 Type 1 audit investigates and documents your SOC 2 security controls at a single point in time. A SOC 2 Type 2 audit will investigate the same controls, but this will be done over a period of time to test their effectiveness. A SOC 2 Type 1 audit is less complex, takes less time to complete, and is usually the cheaper option of the two reports. However, a SOC 2 Type 2 audit will provide greater detail on the effectiveness of your security controls.
Who gets a SOC 2 Type 1 audit?
SOC 2 is a common compliance standard among service organizations that process, handle, or manage customer data. It’s used all over the world, but is most commonly requested by software buyers in North America.
A SOC 2 Type 1 report is less complex and includes less detail than a SOC 2 Type 2 report. For this reason, a SOC 2 Type 1 report is particularly beneficial for organizations that handle less sensitive customer data or data that isn’t highly confidential. For example:
- SaaS organizations that handle consumer habit data (as opposed to healthcare data, intellectual property, or classified business secrets).
- Companies providing analytics and business intelligence services.
- Organizations providing customer experience services, such as managing customer accounts.
For organizations who handle less sensitive data, a SOC 2 Type 1 audit can ensure you’re protecting your customers' data while saving time and resources — especially in comparison to an extensive SOC 2 Type 2 audit.
Is SOC 2 Type 1 required?
SOC 2 compliance is not legally required for any organization — you won’t be fined or penalized for not having a SOC 2. However, your prospects or partners may expect to see your SOC 2 report before they can do business with you. Many organizations will not share their data or buy from vendors that don’t have a SOC 2 report. So while it’s not required, it is often worth the investment when expanding your business to larger accounts or new markets and regions.
Benefits of a SOC 2 Type 1 compliance
Each SOC 2 audit is unique. You’ll have certain controls you’ll need to set up based on the products and services you provide and the markets you sell to, so the benefits you reap will vary based on your SOC 2 specifications. Here are a few benefits that many companies experience after receiving a SOC 2 Type 1:
- Demonstrating a strong security posture to prospects, customers, and partners.
- Saving time and resources on SOC 2 compliance, by opting for the cheaper and less time-intensive option.
- Implementing strong information security practices to better protect customer data.
- Unlocking deals and driving growth by selling to larger organizations that require SOC 2 compliance.
How to prepare for your SOC 2 Type 1 audit
It’s important to properly prepare for your SOC 2 Type 1 audit. Here are some best practices and tips that can help you on your journey to SOC 2 compliance:
1. Define the scope of your SOC 2 Type 1 report
Your auditor will assess your security controls against the Trust Service Criteria, or TSC. These criteria are bucketed into five categories: security, availability, processing integrity, confidentiality, and privacy. The criteria in the security category are required for all SOC reports while the other four criteria categories only need to be included if they apply to the products and services you provide.
Because your SOC 2 Type 1 report will require unique controls based on your organization's offerings, it’s important to properly define the scope of your report before setting up the controls. Checkout this guide to get a better understanding of each of the TSC and how to apply them to your SOC 2 Type 1 report.
2. Do an initial readiness assessment
Once you’ve determined the scope of your SOC 2 Type 1 report, assess what controls you already have in place and which controls you’ll need to adjust or add. Conducting a readiness assessment will help you determine the steps you need to take to get your SOC 2.
Your team can do this manually or this can be done more effectively with a compliance automation platform. A compliance automation platform can help you identify areas of non-compliance and provide you with steps to take to resolve these issues while streamlining the evidence collection process.
3. Delegate roles to each team member
Now that you know what needs to be done, the next step is to determine who’s responsible for which areas of your SOC 2 Type 1 preparation. You can assign individual SOC 2 controls to specific people or assign people to general categories — for example, one person is in charge of personnel policies and practices while another is in charge of technical controls. Make it clear who is responsible for what to prevent security gaps or certain controls from falling through the cracks.
4. Implement and test your controls
Implementation is the most important step of SOC 2 compliance. Now that you know what steps to take to get your SOC 2 Type 1 and have divided up the work, start to execute on your plan and set up the appropriate controls within the scope of your report. We also recommend testing the controls after they’re set up to ensure that they’re operating effectively.
5. Arrange a SOC 2 Type 1 audit
Once you’ve implemented all of the controls within the scope of your SOC 2 Type 1 report, it’s time to hire an auditor. Contact an auditing firm certified by the AICPA to schedule a SOC 2 Type 1 audit. Their audit process will typically take between four to six weeks. Once they’ve completed their audit, they’ll provide you with your SOC 2 Type 1 report.
Get your SOC 2 Type 1
If you need a SOC 2 Type 1 report, Vanta’s trust management platform can help you get started. Our platform has compliance automation capabilities that will guide you through scoping your SOC 2 Type 1 report, conducting a readiness assessment, and providing you with helpful guidance as you set up and test your controls ahead of your audit. We can even help you find an auditor and speed up your SOC 2 Type 1 timeline.
Request a demo to learn more.