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.