SOC 2 vs SOC 3: What's the difference?
SOC 2 vs SOC 3 reporting and compliance
You’ve heard about SOC reports, and you know there are three of them: SOC 1, SOC 2, and SOC 3. But which ones does your company need? How are they different from each other? Are there any benefits from SOC 2 vs SOC 3?
In this post, we’ll focus on the differences between SOC 2 vs SOC 3, and set SOC 1 aside.
SOC 2 and SOC 3 definitions
SOC 2 and SOC 3 audit and reporting standards are established by the American Institute of CPAs (AICPA). Both reports assess and document an organization’s verified security practices. Both SOC 2 and SOC 3 reports are for companies that handle customer data.
SOC 2 and SOC 3 are also used for companies that work with larger enterprises who want to ensure that their vendors are secure. SOC 2 defines criteria for managing customer data based on five “trust service principles":
- Processing Integrity
All SOC 2 reports include the Security category; the other categories are optional, and relevant to your company depending on the commitments your customers expect. To complete a SOC 2, your company’s security measures must be reviewed and verified by a certified auditor.
SOC 2 reports include detailed information about a company’s systems, and the use of these reports is restricted — companies share their SOC 2 with customers and prospects under NDA. These reports can’t be posted anywhere publicly.
What is a SOC 3 report?
SOC 3 reports are developed from the same audit process that yields SOC 2 reports. When it comes to the differences between SOC 3 vs SOC 2 reports, think of SOC 3 as a redacted SOC 2 report. SOC 3 summarizes the material of a SOC 2, and excludes details and results of the testing performed during the audit.
A SOC 2 report must be written in order to prepare a SOC 3 report. Companies can freely post SOC 3 reports on their websites and use them for sales and marketing purposes.
Your company can utilize a SOC 3 vs an SOC 2 report if you have customers or prospects who need assurance about your organization’s verified security practices — but may not need the specific details of a SOC 2 report, or have the knowledge base to utilize its technical information.
Your company should decide if your customer base is seeking the detail provided in a SOC 2, or if they only require the high-level summary of the SOC 3. You will still undertake the same audit process, but you may find that the SOC 3 is most useful to your customers and prospects.
In other words, sharing a SOC 3 report communicates at a high level that you’ve completed the SOC 2 audit process.
The difference between SOC 2 and SOC 3
SOC 2 and SOC 3 reports are both reports that detail your security controls, but how do you know which one is the right fit for your business? Beyond the overviews of each report above, let’s look at some of the details that separate SOC 2 and SOC 3 reports.
Price difference of SOC 2 vs SOC 3
Cost is always a consideration when you decide which security certifications to pursue. So how do the costs of SOC 2 and SOC 3 compare?
The price of both a SOC 2 and a SOC 3 report will vary greatly depending on the complexity of your organization and your security. However, the costs are similar because the steps required in an audit are similar for both, so expect a SOC 2 report and SOC 3 report to cost roughly the same. Because the audits are nearly the same, if you’re pursuing a SOC 2 report, you can often request a SOC 3 report from the same auditor for a small added fee.
Who can perform SOC 2 vs SOC 3 reports?
Both SOC 2 and SOC 3 reports must be prepared by AICPA-approved auditors who are outside your organization. In fact, many auditors offer both SOC 2 and SOC 3 reports, so you can hire the same auditor or auditing firm for both.
Why customers may request SOC 2 or SOC 3 reports
A key difference between SOC 2 and SOC 3 reports is the way they’re used. SOC 2 reports are highly detailed accounts of your information security that customers request so they can know whether their data will be safe in your hands. Many customers, especially those in North America, will only do business with organizations that have SOC 2 reports if there is any data or confidential information involved.
SOC 3 reports, on the other hand, are usually distributed among the public rather than being requested by customers. SOC 3 reports are less technical and are designed as essentially marketing documents that showcase how secure you are without providing private details.
Understanding the differences between SOC 2 and SOC 3 reports
Thus, the primary differences between SOC 2 vs SOC 3 reports are the level of detail in each report, and the ways in which a company can share the report with its customers. One of the most significant differences between SOC vs SOC 3 reports are the levels of detail. A SOC 2 is a highly detailed, restricted-use report, while a SOC 3 is a summarized, general-use report.
Vanta can help your business determine which report is right for you, SOC 2 vs SOC 3. Vanta can also help your company obtain SOC 2 and SOC 3 reports that you can use to communicate your security status and satisfy customer inquiries.
Vanta connects to your tools and infrastructure to continuously monitor your systems for risks and vulnerabilities, and helps your company put robust security controls in place.
Vanta automates and simplifies the process of assessing your company’s security practices to make compliance faster, easier, and more streamlined than ever. Arm your sales force with Vanta security reports so your company can spend its time delivering on your business case. Contact us to get started on SOC reporting.
Determine whether the GDPR applies to you and if so, if you are a processor or controller (or both)
Do you sell goods or service in the EU or UK?
Do you sell goods or services to EU businesses, consumers, or both?
Do you have employees in the EU or UK?
Do persons from the EU or UK visit your website?
Do you monitor the behavior of persons within the EU?
Create a Data Map by taking the following actions
Identify and document every system (i.e. database, application, or vendor) which stores or processes EU or UK based personally identifiable information (PII)
Document the retention periods for PII in each system
Determine whether you collect, store, or process “special categories” of data
Determine whether your Data Map meets the requirements for Records of Processing Activities (Art. 30)
Determine whether your Data Map includes the following information about processing activities carried out by vendors on your behalf
Determine your grounds for processing data
For each category of data and system/application have you determined the lawful basis for processing based on one of the following conditions?
Take inventory of current customer and vendor contracts to confirm new GDPR-required flow-down provisions are included
Review all customer contracts to determine that they have appropriate contract language (i.e. Data Protection Addendums with Standard Contractual Clauses)
Review all in-scope vendor contracts to determine that they have appropriate contract language (i.e. Data Protection Addendums with Standard Contractual Clauses)
Have you performed a risk assessment on vendors who are processing your PII?
Determine if you need to do a Data Protection Impact Assessment
Is your data processing taking into account the nature, scope, context, and purposes of the processing, likely to result in a high risk to the rights and freedoms of natural persons?
Review product and service design (including your website or app) to ensure privacy notice links, marketing consents, and other requirements are integrated
Does the notice to the data subject include the following items?
Does the notice also include the following items?
Do you have a mechanism for persons to change or withdraw consent?
Update internal privacy policies to comply with notification obligations
Update internal privacy notices for EU employees
Determine if you need to appoint a Data Protection Officer, and appoint one if needed
Have you determined whether or not you must designate a Data Protection Officer (DPO) based on one of the following conditions (Art. 37)?
If you export data from the EU, consider if you need a compliance mechanism to cover the data transfer, such as model clauses
If you transfer, store, or process data outside the EU or UK, have you identified your legal basis for the data transfer (note: most likely covered by the Standard Contractual Clauses)
Have you performed and documented a Transfer Impact Assessment (TIA)?
Confirm you are complying with other data subject rights (i.e. aside from notification)
Do you have a defined process for timely response to Data Subject Access Requests (DSAR) (i.e. requests for information, modification or deletion of PII)?
Are you able to provide the subject information in a concise, transparent, intelligible and easily accessible form, using clear and plain language?
Do you have a process for correcting or deleting data when requested?
Do you have an internal policy regarding a Compelled Disclosure from Law Enforcement?
Determine if you need to appoint an EU-based representative, and appoint one if needed
Have you appointed an EU Representative or determined that an EU Representative is not needed based on one of the following conditions?
If operating in more than one EU state, identify a lead Data Protection Authority (DPA)
Do you operate in more than one EU state?
If so, have you designated the Supervisory Authority of the main establishment to act as your Lead Supervisory Authority?
Implement Employee Trainings to Demonstrate Compliance with GDPR Principles and Data Subject Rights
Have you provided appropriate Security Awareness and Privacy training to your staff?
Update internal procedures and policies to ensure you can comply with data breach response requirements
Have you created and implemented an Incident Response Plan which included procedures for reporting a breach to EU and UK Data Subjects as well as appropriate Data Authorities?
Do breach reporting policies comply with all prescribed timelines and include all recipients i.e. authorities, controllers, and data subjects?
Implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk
Have you implemented encryption of PII at rest and in transit?
Have you implemented pseudonymization?
Have you implemented appropriate physical security controls?
Have you implemented information security policies and procedures?
Can you access EU or UK PII data in the clear?
Do your technical and organizational measure ensure that, by default, only personal data which are necessary for each specific purpose of the processing are processed?
Consider streamlining GDPR compliance with automation
Transform manual data collection and observation processes into continuous monitoring
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Develop a roadmap for successful implementation of an ISMS and ISO 27001 certification
Implement Plan, Do, Check, Act (PDCA) process to recognize challenges and identify gaps for remediation
Consider ISO 27001 certification costs relative to org size and number of employees
Clearly define scope of work to plan certification time to completion
Select an ISO 27001 auditor
Set the scope of your organization’s ISMS
Decide which business areas are covered by the ISMS and which are out of scope
Consider additional security controls for business processes that are required to pass ISMS-protected information across the trust boundary
Inform stakeholders regarding scope of the ISMS
Establish an ISMS governing body
Build a governance team with management oversight
Incorporate key members of top management, e.g. senior leadership and executive management with responsibility for strategy and resource allocation
Conduct an inventory of information assets
Consider all assets where information is stored, processed, and accessible
- Record information assets: data and people
- Record physical assets: laptops, servers, and physical building locations
- Record intangible assets: intellectual property, brand, and reputation
Assign to each asset a classification and owner responsible for ensuring the asset is appropriately inventoried, classified, protected, and handled
Execute a risk assessment
Establish and document a risk-management framework to ensure consistency
Identify scenarios in which information, systems, or services could be compromised
Determine likelihood or frequency with which these scenarios could occur
Evaluate potential impact of each scenario on confidentiality, integrity, or availability of information, systems, and services
Rank risk scenarios based on overall risk to the organization’s objectives
Develop a risk register
Record and manage your organization’s risks
Summarize each identified risk
Indicate the impact and likelihood of each risk
Document a risk treatment plan
Design a response for each risk (Risk Treatment)
Assign an accountable owner to each identified risk
Assign risk mitigation activity owners
Establish target dates for completion of risk treatment activities
Complete the Statement of Applicability worksheet
Review 114 controls of Annex A of ISO 27001 standard
Select controls to address identified risks
Complete the Statement of Applicability listing all Annex A controls, justifying inclusion or exclusion of each control in the ISMS implementation
Continuously assess and manage risk
Build a framework for establishing, implementing, maintaining, and continually improving the ISMS
Include information or references to supporting documentation regarding:
- Information Security Objectives
- Leadership and Commitment
- Roles, Responsibilities, and Authorities
- Approach to Assessing and Treating Risk
- Control of Documented Information
- Internal Audit
- Management Review
- Corrective Action and Continual Improvement
- Policy Violations
Assemble required documents and records
Review ISO 27001 Required Documents and Records list
Customize policy templates with organization-specific policies, process, and language
Establish employee training and awareness programs
Conduct regular trainings to ensure awareness of new policies and procedures
Define expectations for personnel regarding their role in ISMS maintenance
Train personnel on common threats facing your organization and how to respond
Establish disciplinary or sanctions policies or processes for personnel found out of compliance with information security requirements
Perform an internal audit
Allocate internal resources with necessary competencies who are independent of ISMS development and maintenance, or engage an independent third party
Verify conformance with requirements from Annex A deemed applicable in your ISMS's Statement of Applicability
Share internal audit results, including nonconformities, with the ISMS governing body and senior management
Address identified issues before proceeding with the external audit
Undergo external audit of ISMS to obtain ISO 27001 certification
Engage an independent ISO 27001 auditor
Conduct Stage 1 Audit consisting of an extensive documentation review; obtain feedback regarding readiness to move to Stage 2 Audit
Conduct Stage 2 Audit consisting of tests performed on the ISMS to ensure proper design, implementation, and ongoing functionality; evaluate fairness, suitability, and effective implementation and operation of controls
Address any nonconformities
Ensure that all requirements of the ISO 27001 standard are being addressed
Ensure org is following processes that it has specified and documented
Ensure org is upholding contractual requirements with third parties
Address specific nonconformities identified by the ISO 27001 auditor
Receive auditor’s formal validation following resolution of nonconformities
Conduct regular management reviews
Plan reviews at least once per year; consider a quarterly review cycle
Ensure the ISMS and its objectives continue to remain appropriate and effective
Ensure that senior management remains informed
Ensure adjustments to address risks or deficiencies can be promptly implemented
Calendar ISO 27001 audit schedule and surveillance audit schedules
Perform a full ISO 27001 audit once every three years
Prepare to perform surveillance audits in the second and third years of the Certification Cycle
Consider streamlining ISO 27001 certification with automation
Transform manual data collection and observation processes into automated and continuous system monitoring
Identify and close any gaps in ISMS implementation in a timely manner
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Determine which annual audits and assessments are required for your company
Perform a readiness assessment and evaluate your security against HIPAA requirements
Review the U.S. Dept of Health and Human Services Office for Civil Rights Audit Protocol
Conduct required HIPAA compliance audits and assessments
Perform and document ongoing technical and non-technical evaluations, internally or in partnership with a third-party security and compliance team like Vanta
Document your plans and put them into action
Document every step of building, implementing, and assessing your compliance program
Vanta’s automated compliance reporting can streamline planning and documentation
Appoint a security and compliance point person in your company
Designate an employee as your HIPAA Compliance Officer
Schedule annual HIPAA training for all employees
Distribute HIPAA policies and procedures and ensure staff read and attest to their review
Document employee trainings and other compliance activities
Thoroughly document employee training processes, activities, and attestations
Establish and communicate clear breach report processes
to all employees
Ensure that staff understand what constitutes a HIPAA breach, and how to report a breach
Implement systems to track security incidents, and to document and report all breaches
Institute an annual review process
Annually assess compliance activities against theHIPAA Rules and updates to HIPAA
Continuously assess and manage risk
Build a year-round risk management program and integrate continuous monitoring
Understand the ins and outs of HIPAA compliance— and the costs of noncompliance
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