SOC 1® vs SOC 2® Reports: Which Fits Your Business Needs?Â
This guide breaks down the differences in SOC1 vs SOC2, when to use each, and how the right report supports your business growth.
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System and Organization Controls Reporting
Build trust through independent verification of your data security and internal controls
Is your organization facing increasing demands from clients who want proof that your internal controls are effective? You’re not alone. As service organizations handle more sensitive customer data than ever before, your clients need assurance that their information is protected throughout its entire lifecycle—from collection and processing to storage and disposal.
Your Clients Are Asking for More Than Cost Savings
When your customers choose to work with you, they’re entrusting you with their most valuable asset: their data. And in today’s business environment, that trust requires verification. Your clients want to see documented evidence that you have controls in place to protect their information.
Whether you’re a SaaS provider, data center, payroll processor, or any service organization handling customer data, you’re likely fielding requests for SOC reports. These inquiries can be time-consuming to address individually, and without an independent examination, you may be at a competitive disadvantage.
How SOC Reports Demonstrate the Strength of Your Controls
System and Organization Controls (SOC) reports provide independent verification of your internal controls. While not mandatory, these examination reports serve as powerful proof points that communicate to your clients—and prospects—that your systems are designed and operating effectively.
A SOC examination evaluates the controls within the systems you use to deliver services to your customers. This independent assessment, performed in accordance with AICPA standards, gives your stakeholders confidence in your operations and can help you:
- Reduce repetitive client inquiries about your control environment
- Streamline your sales process by proactively addressing security concerns
- Differentiate your organization in a competitive marketplace
- Support your customers’ own compliance requirements related to vendor management
- Demonstrate your commitment to data security and operational excellence
Choosing the Right SOC Report for Your Organization
Depending on your services and your customers’ needs, you’ll need to determine which type of SOC report is most relevant:
RELATED INSIGHTS
SOC 1®: Financial Reporting Controls
Does your service impact your clients' financial reporting? SOC 1 examinations focus on controls at your organization that are relevant to user entities' internal control over financial reporting. This is particularly important for service organizations in payroll processing, claims processing, or other services that affect customers' financial statements.
SOC 2®: Trust Services Criteria
Are your clients concerned about security, availability, processing integrity, confidentiality, or privacy? SOC 2 examinations evaluate your controls across one or more of these trust services criteria. This report is ideal for technology companies, cloud service providers, and any organization where data security is paramount.
SOC 3®: General Use Report
Do you need a version you can share publicly? SOC 3 reports provide a general-use summary of your SOC 2 examination results that you can post on your website or share broadly with prospects and customers.
SOC Services
BPM provides comprehensive SOC services designed to meet your specific needs. Our team works with service organizations across industries to conduct examinations in accordance with current AICPA Statement on Standards for Attestation Engagements (SSAE).
SOC Readiness Assessments
Not sure if you’re ready for a formal examination? We’ll assess your current control environment and help you identify any gaps before you begin the formal SOC process.
SOC 1® Examinations
Examination of Controls at a Service Organization Relevant to User Entities’ Internal Control over Financial Reporting
SOC 2® Examinations
Examination of Controls at a Service Organization Relevant to the 2017 Trust Services Criteria for Security, Availability, Processing Integrity, Confidentiality, or Privacy (TSP 2017)
SOC 3® Reports
General use report issued in conjunction with a SOC 2 examination
Ready to Strengthen Client Trust Through SOC Reporting?
Your clients are looking for transparency and verification. A SOC report can give them the confidence they need while positioning your organization as a trusted partner committed to security and compliance.
Let’s discuss which SOC examination is right for your organization and how we can support you through the process.
Contact BPM today to learn more about our System and Organization Controls reporting services.
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