SOC 2 (System and Organization Controls) is one of the most important compliance frameworks for Saas companies. It deals heavily with IT and security controls, but it also covers business operations that reflect a comprehensive approach to security governance. SOC 2 is a major determining factor in winning new customers and partners. And, you may risk losing existing customers if you can’t show that you’re taking appropriate measures to protect their data. 

Once you know you want to become SOC 2 compliant, you have an important decision ahead of you — Type 1 or Type 2? Before you start the prep process, it’s important to understand these two types of SOC 2 audits and decide which type makes the most sense for your organization. 

What is a SOC 2 Type 1?

Both SOC 2 Type 1 and Type 2 audits evaluate the design and suitability of an organization’s controls, but SOC 2 Type 1 has a key quality that sets it apart — it evaluates these controls at a single point in time. The purpose of a SOC 2 Type 1 audit is to determine if the internal controls that are there to safeguard client information are sufficient and designed appropriately. The certified auditor looks at the description of the controls that are currently in place and also provides an opinion on how appropriate the design of those controls appears to be in that moment of time. You can check out our SOC 2 report example to see what this looks like in real life.

A SOC 2 Type 1 audit will include an “as of” date, which indicates exactly when the controls were deemed acceptable. Because a Type 1 audit only evaluates a short window of time, a company can typically complete one in around six weeks. SOC 2 Type 1 is a strong first step toward demonstrating to your partners and customers that your data management practices are robust enough to ensure the security of their information.

What is a SOC 2 Type 2?

SOC 2 Type 2 report attests to the same qualities as a Type 1 — the design and suitability of controls — but it goes an important step further. A Type 2 audit contains an additional section that evaluates the operating effectiveness of the controls that are in place. So, a Type 2 audit will conduct tests and provide evidence that these controls are operating and designed appropriately. That evaluation has to happen over a period of time — typically between six and twelve months — in order to be accurate. This is in contrast to the “moment in time” approach used in the Type 1 audit.

A Type 2 report takes longer to complete, but provides stronger proof of the strength of your security stance. It offers assurance that not only are your company’s controls designed and applied appropriately but that they function and remain intact over time.

How do you choose between Type 1 and Type 2?

These two versions of SOC 2 both carry a variety of benefits, including credibility, improved security, and a competitive advantage. But, there are strategic points to consider when deciding which one to pursue. 

For a business pursuing SOC 2 compliance for the first time, it may make sense to focus on Type 1 in order to place ample focus on the design of the controls. Also, if an organization needs an audit completed in a quick turnaround time, starting with Type 1 is logical because it can be achieved so much faster. It will communicate to prospective clients that best practices are in place, while also laying the groundwork for a more detailed audit when the time is appropriate. 

However, Type 2 is a more robust version of the SOC 2 audit, and larger businesses may be looking for this level of comprehensiveness. For organizations who have already achieved Type 1, Type 2 is an important next step to continue improving processes and increasing your competitive edge. Companies that have more time to invest in their first-time audit may be interested in going straight to a Type 2. This is referred to as a running start, and while it might get you to your end goal faster, it has some significant risks as well. 

Ultimately, you’ll want to consider your organization’s timelines and priorities when deciding between SOC 2 Type 1 and Type 2. How much time do you have to prepare for your SOC 2 audit? What are your short and long-term goals? How developed is your current security stance? 

SOC 2 Type 1 or Type 2 — Strike Graph is ready to help

If you’re ready to continue building customer and partner trust in your operational systems, Strike Graph is here to help. Our tailored, scalable approach right-sizes the SOC 2 process for your company’s unique needs, saving you time and money. And, our multi-framework platform means that the work you do for SOC 2 easily translates into future security certifications as your company grows.