SOC 2 Type 1 vs. Type 2 Explained: Differences, Use Cases, and Why It Matters

 SOC 2 Type 1 vs. Type 2 — Explanation

SOC 2 (Service Organization Control 2) is an audit framework developed by the AICPA to evaluate how well a service organization protects customer data based on the Trust Services Criteria:

• Security (required)
• Availability
• Processing Integrity
• Confidentiality
• Privacy

SOC 2 reports come in two forms: Type 1 and Type 2, each serving different purposes and offering different levels of assurance.

SOC 2 Type 1 — What It Is

Definition

A SOC 2 Type 1 report evaluates the design of an organization’s security controls at a single point in time.

It answers the question:

“Are the controls designed properly as of today?”

 What It Evaluates

• Policies, configurations, and procedures exist and are designed correctly to meet the Trust Services Criteria.
• No long-term testing is performed, only design suitability.

Timing

• Point‑in‑time snapshot
• Typically completed in weeks, much faster than Type 2

Use Cases

• Early‑stage companies needing fast compliance
• Organizations with newly implemented controls
• Businesses needing proof of security to close deals quickly

Limitations

• Does not prove that controls actually operate consistently over time
• Many enterprise customers reject Type 1 reports

SOC 2 Type 2 — What It Is

Definition

A SOC 2 Type 2 report evaluates both:

• Design of controls
• Operating effectiveness of those controls over a period of 3–12 months

It answers:

“Do the controls work reliably over time?”

What It Evaluates

• Auditor tests real evidence: logs, tickets, change records, access reviews
• Demonstrates continuous control operation

Timing

• Review period: 3–12 months
• Total audit timeline: 6–20 months

Use Cases

• Required by enterprise customers
• Companies in regulated industries
• SaaS vendors that store sensitive customer data

Strengths

• Provides the highest level of assurance
• Demonstrates operational maturity
• Widely required in vendor security assessments (RFPs)

Key Differences: SOC 2 Type 1 vs. Type 2

Which One Should an Organization Choose?

Choose Type 1 if:

• You need something fast to unblock deals
• Your controls were recently implemented
• You’re validating that your control design is correct before deeper auditing

Choose Type 2 if:

• You sell to mid‑market or enterprise customers
• You operate in regulated industries (finance, health, government)
• You want long‑term credibility with vendors and partners

According to SOC2auditors.org, 98% of Fortune 500 companies require a Type 2 report, making it the de facto standard for serious B2B SaaS.

Summary

Both are valuable, but Type 2 is the industry standard for trust and vendor due diligence.