SOC 2 vs SOC 3

SOC 2 vs SOC 3: Key differences

If you’re running a SaaS business or providing cloud services, having a strong security posture is critical for increasing sign-ups. Along with applying infosec security measures to your system, you need compliance attestation, too, to prove to your clients, investors, and potential customers that security is your top priority. And one such compliance standard is SOC (Service Organization Controls). 

SOC is a set of standard compliances for service organizations developed by AICPA (American Institute of Certified Public Accountants). The various SOC audits – SOC 1, SOC 2, and SOC 3 define how organizations should manage customer data. 

However, choosing which SOC report you need for your organization can confuse you. In this blog, we will walk you through all the differences between SOC 2 and SOC 3 and help you decide which one to choose for your organization.

Overview: SOC 3 vs SOC 2 

SOC 2 and SOC 3 reports are determined by the same AICPA standards, and the audit performed by the CPA for these two reports is significantly similar. Both reports are designed to address Trust Services Criteria (TSCs) – security, availability, processing integrity, confidentiality, and privacy of the data. Therefore, the controls that the auditor identifies and evaluates are the same for both reports.

A SOC 2 examination is a restricted-to-use report, which means the report is restricted to the service organization’s management, customers, and prospective customers. It includes an auditor’s opinion, management’s assertion, system description, test of controls, and opinion of the auditor. 

A SOC 3 report, on the other hand, can be made available to the public. It includes the auditor’s opinion, management assertion, and the gist of the service organization. 

What is the difference between a SOC 2 and SOC 3 report?

Both SOC 2 and SOC 3 reports detail your system security controls. But how do you know which is the right fit for your organization? Beyond the overviews of each report above, let’s look at some of the details that separate SOC 2 and SOC 3 reports.

PurposeTo prove to customers, stakeholders and investors that security is a top priority Used as a marketing collateral. It is usually mentioned on the organization’s website
AudienceThe report is restricted to the service organization’s management, customers, and prospective customers.The report is intended for the general public
Report type SOC 2 report is further categorized into Type 1 and Type 2SOC 3 report is always a Type 2
Test of controls Auditor’s test of controls security, availability, processing integrity, privacy and confidentiality are defined in the reportAuditor’s test of controls is not defined in the report 

In short, a SOC 2 report is used to prove to customers, vendors, stakeholders, and investors that security is your top priority. The report details the security controls, methods used to test them, system description, and management assertion. Whereas a SOC 3 report is used as marketing collateral and is shared with the general public. 

Why do you need a SOC 2 report first?

Basically, SOC 3 report is an extraction of a SOC 2 report. The only difference between SOC 2 and SOC 3 reports is the way the reports are designed. Therefore, it’s ideal to get a SOC 2 report first and get a SOC 3 report if you intend to attract new customers. It acts as a marketing collateral.

A SOC 2 report ensures the system’s internal controls related to security, availability, processing integrity, confidentiality, and privacy. Along with this, it delivers numerous benefits outlined below: 

  1. Helps gain a competitive advantage 
  2. Builds brand reputation 
  3. Enhances information security practices
  4. Streamlines compliance mapping 

How to get started with SOC 2 and SOC 3?

Now that you clearly understand the similarities and differences between SOC 2 and SOC 3, it’s time to leverage these reports for your organization. If your organization has never undergone SOC audits, the steps below will help you get started. 

1. Prepare for the audit 

Choose the SOC audit: SOC 2 or SOC 3? And then define the scope of the audit. Talk to the auditor to get an initial understanding of what goes through the audit process. 

2. Update procedures and policies 

During a SOC 2 Type 2 audit, your organization must prove to the auditor that you are following the policies and processes you have created. It also helps people across the organization to follow the same standardized practices. 

Common components of policies and procedures include:

  • System access 
  • Security roles 
  • Security training 
  • Incident response 
  • Disaster recovery
  • Risk assessment and analysis 

3. Establish security controls

Once policies and procedures are established, it’s time to put technical controls across your infrastructure. In addition to following your internal data security protocols, your organization’s best practices should match the Trust Services Criteria (TSC) defined by the AICPA. 

Some security controls include access control, encryption, firewalls, backups, intrusion detection, and vulnerability scanning. 

4. Gather documentation 

To streamline the SOC 2 and SOC 3 audit process, you should have documentation and evidence, such as Service Level Agreements (SLAs), technical control documents, third-party contracts, vendor contracts, and risk assessment documents.

SOC 2 audit is a tedious and long-winded process and takes several months to complete. Therefore, having these documents ready will help the audit process go faster.

5. Schedule the SOC 2 audit

Once the policies, procedures, and documents are in place, it’s time to schedule your SOC audit officially. Now, choose the right auditing firm to conduct the SOC 2 audit. 

Read our blog on how to pick the right SOC 2 auditor here.

Closing thoughts

Getting SOC 2 compliant can be overwhelming if you run a fast-growing SaaS organization. Managing and performing repeated tasks manually can get tedious and diverts your focus from business and growth. Investing so extensively of your valuable time and workforce can be immensely expensive for your organization, and it can delay your growth journey too!

Scrut is a smart and radically simple governance, risk and compliance automation platform for growing startups and mid-market enterprises. With Scrut, compliance teams can reduce ~70% of their manual effort in continuously maintaining compliance towards SOC 2, ISO 27001, GDPR, PCI DSS, HIPAA and CCPA. Schedule your demo today to see how it works.

Frequently asked questions (FAQs)

1. Who performs a SOC 2 audit?

A SOC 2 audit is performed by a licensed CPA or equivalent, such as a professional accountant in public practice licensed in a jurisdiction outside the U.S.

2. Does a SOC 2 auditor’s opinion cover the service organization’s adherence to pertinent rules and regulations like GDPR, CCPA, or HIPAA?

No. A SOC 2 examination addresses only the design and the operating effectiveness of IT controls that support the service organization’s compliance with specified laws and regulations. In simple terms, the SOC 2 report does not provide an opinion on whether the service organization complied with relevant laws or regulations.

3. Who needs a SOC 3 report?

Organizations that provide cloud services, enterprise systems housing third-party data, IT systems management, and data centre colocation facilities go for SOC 3 audit. If you want to communicate that your organization’s controls are appropriately designed, implemented, and operating effectively, but want to keep the details of controls private, then the SOC 3 report may be right for you.

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