SOC 2 vs ISO 27001 : Understanding the Difference
Navigating the world of information security standards can feel daunting. Two of the most common frameworks you’ll encounter are SOC 2 and ISO/IEC 27001. While both demonstrate a commitment to security, they serve different purposes and follow distinct paths to compliance. Understanding the key differences is paramount for deciding which framework or both is right for your organization.
This guide breaks down everything business leaders and security practitioners need to know. We will compare and contrast SOC 2 and ISO 27001, explore their goals, processes, and costs, and help you determine the best fit for your company’s needs.
What is SOC 2?
SOC 2 (System and Organization Controls 2) is a security framework developed by the American Institute of Certified Public Accountants (AICPA). It has been designed specifically for service organizations that store, process, or transmit customer data in the cloud. Think SaaS companies, data centers, and managed IT service providers.
The primary objective of a SOC 2 report is to provide assurance to your customers and partners that you have effective controls in place to protect their data. It’s not a rigid checklist but a flexible framework based on five Trust Services Criteria (TSC):
- Security (Required): Protecting information and systems against unauthorized access, use, and disclosure.
- Availability (Optional): Ensuring systems are available for operation and use as agreed.
- Processing Integrity (Optional): Confirming system processing is complete, valid, accurate, and authorized.
- Confidentiality (Optional): Protecting information designated as confidential.
- Privacy (Optional): Safeguarding the collection, use, and disclosure of personal information.
A SOC 2 audit results in an attestation report that is issued by a licensed CPA firm, not a “certification.” This report provides the design and operational effectiveness of your security controls.
What is ISO/IEC 27001?
ISO/IEC 27001 is the leading international standard for information security management. It provides a systematic approach to managing sensitive company information so that it remains secure. Unlike SOC 2, which focuses on customer data protection, ISO 27001 adopts a broader view of an organization’s overall security posture.
The core of ISO 27001 is the Information Security Management System (ISMS). An ISMS is a documented, risk-based approach to managing people, processes, and technology to protect all of an organization’s information assets.
The standard includes a list of 93 potential security controls in what’s known as Annex A. Organizations select and implement controls from Annex A based on a thorough risk assessment. The goal is to build a resilient, repeatable, and continuously improving security program. Successful completion of an audit by an accredited registrar results in an ISO 27001 certification.
Scope and Control Coverage
The difference in scope is one of the most significant distinctions between the two frameworks.
- SOC 2 Scope: The scope is flexible and defined by the organization based on the services it provides. It must include the Security TSC, but the other four (Availability, Confidentiality, Processing Integrity, Privacy) are optional. The controls are designed by the organization to meet the TSC requirements, making it a highly adaptable framework.
- ISO 27001 Scope: The scope centres on the ISMS. The organization must define which parts of the business the ISMS will cover. A key requirement is to produce a Statement of Applicability (SoA) that justifies the inclusion or exclusion of each of the 93 security controls listed in Annex A. This makes the control set more prescriptive, though organizations still have flexibility based on their risk assessment.
Audit and Attestation Process
The journey to compliance looks different for each standard.
SOC 2: The Type I vs. Type II Report
A SOC 2 audit can result in one of two reports:
- SOC 2 Type I: A “point-in-time” assessment. The auditor evaluates the design of your security controls on a specific date to determine if they are suitably designed to meet the relevant Trust Services Criteria.
- SOC 2 Type II: A more rigorous, long-term assessment. The auditor tests both the design and the operational effectiveness of your controls over a period of time, typically 6 to 12 months. A SOC 2 Type II report provides much stronger assurance and is what most customers look for.
The report is an attestation, not a certification. You receive a detailed document to share with stakeholders, but there is no official certificate to display.
ISO 27001: The Certification Cycle
ISO 27001 is a formal certification process that follows a three-year cycle:
1. Stage 1 Audit: A readiness assessment where the auditor reviews your ISMS documentation (like the risk assessment and SoA) to ensure it meets the standard’s requirements.
2. Stage 2 Audit: The main certification audit. The auditor conducts a deep dive, testing your controls to verify they are implemented and effective as documented. If you pass, you receive your ISO 27001 certification.
3. Surveillance Audits: These occur annually for the next two years. The auditor reviews a portion of your ISMS to ensure you are maintaining compliance and continually improving your security posture.
4. Recertification Audit: In the third year, you undergo a full recertification audit to renew your certificate for another three years.
| Feature | SOC 2 | ISO/IEC 27001 |
|---|---|---|
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Assure customers your systems protect their data. | Build and manage a comprehensive ISMS to protect all company info. |
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Security of systems processing customer data. | Holistic information security risk management across the organization. |
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AICPA (American Institute of CPAs) | ISO (International Organization for Standardization) |
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Based on 5 Trust Services Criteria (TSC). Controls are flexible. | Based on a risk assessment and 93 controls in Annex A. |
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Attestation report (Type I or Type II). | Formal certification valid for three years. |
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Primarily North America. | Globally recognized, especially in Europe and Asia. |
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Single audit for Type I or Type II report. Annual renewal. | Three-year cycle (Stage 1, Stage 2, surveillance audits). |
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SaaS companies, data processors, cloud service providers. | Any organization seeking a formal, internationally recognized security program. |
SOC 2 vs ISO 27001: A Side-by-Side Comparison
Cost, Timelines, and Resource Considerations
Both frameworks represent a significant investment in time and resources.
- Timeline:
- SOC 2: Preparation can take 3-6 months. A Type I audit is quick, but the observation period for a SOC 2 Type II report adds another 6-12 months.
- ISO 27001: Building the ISMS can take 6-12 months or longer, depending on the organization’s maturity. The audit process itself takes a few weeks.
- Cost: Costs vary widely based on company size, complexity, and existing security posture. Expenses include readiness consulting, employee time, new security tools, and the audit itself. ISO 27001 audits can sometimes be more expensive due to the formal certification process and travel required for international auditors.
- Resources: Both require a dedicated internal team or project manager. You’ll need involvement from IT, engineering, HR, and legal departments to implement policies, document procedures, and gather evidence for the auditors.
When to Choose SOC 2 vs. ISO 27001
The choice often comes down to customer expectations and market focus.
Choose SOC 2 if:
- Your primary market is North America.
- Your customers, particularly large enterprises, are specifically asking for a SOC 2 report as part of their vendor due diligence.
- You are a SaaS, cloud hosting, or data processing company.
Choose ISO 27001 if:
- You operate globally or have a significant customer base in Europe or Asia.
- You want an internationally recognized certification to demonstrate your commitment to security best practices.
- You need a structured framework to build a comprehensive ISMS from the ground up.
Better Together: Using SOC 2 and ISO 27001
SOC 2 and ISO 27001 are not mutually exclusive. In fact, they complement each other extremely well.
Because ISO 27001 requires you to build a comprehensive ISMS, completing it first lays a strong foundation for a SOC 2 audit. Many of the controls and processes required for ISO 27001 (like risk management, access control, and HR security) directly map to the SOC 2 Trust Services Criteria.
By leveraging the work done for an ISO 27001 certification, an organization can significantly streamline its path to a SOC 2 report. Pursuing both allows you to satisfy a broad range of customer demands, from North American enterprises to global partners, demonstrating a top-tier security posture.
FAQ
Neither is inherently “better.” They serve different purposes. ISO 27001 is a certification for your management system, while SOC 2 is an attestation about your controls related to customer data. The best choice depends on your business goals and customer requirements.
Yes. Many organizations pursue both. Since there is significant overlap in the control requirements, you can perform a “mapped” audit that covers both frameworks simultaneously, saving time and resources.
A SOC 2 report is typically renewed annually. An ISO 27001 certification is valid for three years, with mandatory annual surveillance audits to maintain it.
While not mandatory, many organizations hire consultants for readiness assessments and implementation guidance. An expert can help you navigate the complexities, avoid common pitfalls, and prepare for a successful audit.