Differences Between Soc 1 and Soc 2 (With Table)

Soc is widely renowned as Security Operational Centre; it is an organization that is formed to employ relevant people who are technical experts in order to look after the organization’s security issues, thereby tackling cyber activities. Soc enables the detection, analysis, prevention, response to any cybersecurity issues faced by that organization. 

Soc 1 vs Soc 2

The difference between Soc 1 and Soc 2 is that Soc 1 is an audit report based on the internal control over the client/user’s financial statements of the organization. On the contrary, Soc 2 is an auditing process, which is carried out to guarantee standardized security over the organization’s interest and client’s privacy.

Having said that, Soc 1 is written documentation that encloses the internal control over financial reporting. Simply, it jots down audit reports on internal controls of a customer’s financial statements within the organization. This type of system is considered important as they are very beneficial to lend out audit reports of the organization in the time of need. 

Soc 2 is a type of auditing process that makes sure that the internal control and the security of the organization’s interest and client’s privacy is tight enough. Furthermore, Soc 2 is a part of the trust services criteria, mainly focusing on the organization’s security availability, processing integrity, confidentiality controls, and many more issues pertinent to AICPA. 

Comparison Table Between Soc 1 and Soc 2

Parameters of ComparisonSoc 1Soc 2
MeaningService Organisation Control 1 (Soc 1) is a written audit report on internal controls of a customer’s financial statements which are very helpful at the time of auditing the organisation. Service Organisation Control 2 (Soc 2) is an auditing process that aims to ensure strong internal control and the security of the organisation’s interest as well as client’s privacy. 
PurposeSoc 1 accentuates the internal controls over financial statements of clients & their services.Soc 2 emphasises the reports on the internal control’s security, confidentiality, availability of reports, processing integrity among clients & organisation and ensuring privacy. 
BenefitsKeeping an internal control on the financial records of the user’s that benefits efficient internal control, productive service to its Soc 1 users, protects user’s financial statements by establishing a reliable relationship between servicers and users. Moreover, smooth the policies & procedures of the organisation with high-level security.Dual benefits in ensuring effectiveness on both sides- organisation and users. Provide better services, assured security, Access control over clients & organisation’s confidentiality. 
TypesSoc 1 is categorized into two types, whereby Type 1 is about Audit taken place at a specific time period. Besides, Type 2 is examining internal controls over a period of time.There are two types of Soc 2- Type 1 functions about the existence of control in the business. Whereas, Type 2 depicts the mechanism of the control.
Audiences Soc 1 underscore the clients/user’s financial statements which are done as a report to the auditor for auditing purposes.  Customers and stakeholders are the main parties who have required Soc 2 compliance, should know the report on internal control 

What is Soc 1?

Soc 1 is a written form of documents that encloses internal control over financial reporting. Simply, it jots down audit reports on internal controls of a customer’s financial statements within the organization. This type of system is considered important as they are very beneficial to lend out audit reports of the organization in the time of need. 

Speaking of which, Soc 1 has the tendency to accentuate the internal controls over financial statements of clients & their services efficiently. The pith of Soc 1 is to keep internal control over the financial records of the user’s in order to offer productive service to its Soc 1 users. Eventually, this involves the protection of the user’s financial statements, which can be attained by establishing a reliable relationship between servicers and users. Moreover, Soc 1 smooths the policies and procedures of the organization with high-level security management. 

Under Soc1, there are two types of tasks involved. Where the first one is related to the audits taken at a specific time period, while the other type examines internal controls over a period of time. 

What is Soc 2? 

On the other hand, Soc 2 is an auditing process that assures that the internal control and the security of the organization’s interest and client’s privacy is tight enough to avoid cyber security issues. Furthermore, Soc 2 is a part of the trust services criteria, mainly focusing on the organization’s security availability, processing integrity, confidentiality controls, and many more issues pertinent to AICPA. 

To put it in an elaborate way, Soc 2 emphasises the audit reports on the internal control’s security, confidentiality, availability of reports, processing integrity among clients within an organisation, and ultimately ensuring privacy. 

A few important benefits of Soc 2 include the steps followed to bring out the effectiveness of the organisation and users. Over and above, Soc 2 renders better services with assured security, access control over clients & organisation’s confidentiality, and many more. 

Similarly, Soc 2 also has two types, the functions about the existence of control in the business and mechanism depictions of the control.

Recapitalizing the Soc 2 importance, both customers and stakeholders are the main parties involved in Soc 2 as they need the report on internal control often. 

Main Differences Between Soc 1 and Soc 2

  1. Soc 1 is an audit report on internal control over client/user’s financial statements. Albeit Soc 2 is an auditing process that is conducted to ensure standardized security over the organisation’s interest and client’s privacy.
  2. Soc 1 is highly recommended in a company to report on internal control of user’s financial statements for smooth internal auditing. Meanwhile, Soc 2 focuses on securing users and organisation confidential information over financial matters and integrating among organisations & clients.
  3. Soc 1 is categorised into two types; hereby, Type 1 focuses on the audit taken at a specific or given period of time, and Type 2 is about scrutinizing the internal control report over a period of time. Whereas Soc 2 is also grouped into two types, whereby Type 1 is about ensuring the existence of control in the company and type 2 depicts the role of such controls. 
  4. Soc 1 benefits in protecting user’s financial statements by establishing a reliable relationship between servicers and users. On the other hand, Soc 2 provides two-way authenticity- Organisation and users in protecting their confidential report, assurance of 100 per cent security and better services. 
  5. Soc 1 targets auditors in providing reports on internal control over users financial statements for smooth auditing. Notwithstanding, Soc 2 is useful for customers and stakeholders in knowing the reports of their privacy and their organisation statements. 

Conclusion

Soc 1 and Soc 2 are a method of collecting a report on internal control over the financial statements of the organisations as well as the clients for auditing. Whereby Soc 1 is a written audit report on the internal control of the client’s financial statements, which helps to build a smooth relationship with users/clients. Soc 1 comes with two types. Type 1 focuses on the report of the audit that takes place at a specific period of time, and Types 2 reports on the examination of the auditing over a period of time. 

Soc 2 is an auditing process that is done to ensure high secured internal control of client’s privacy and the organisation’s interest. Soc 2 will establish a reliable relationship between the organisation and clients, access security over financial statements and provide top-notch services to its users. Soc 2 is also categorised into two types, where Type 1 reports the existence of internal control and Type 2 is about the efficiency performance of the control in the organization.

References

  1. https://academic.oup.com/biolinnean/article-abstract/1/3/311/2682522
  2. https://ieeexplore.ieee.org/abstract/document/5466167/
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