Commonly, you can confuse SOC1 compliance and SOC2 compliance. Both are two distinct sets of standards developed by the American Institute of Certified Public Accountants (AICPA). Both compliances have different aims and scopes. This blog will guide the difference between them.
Understanding SOC 1 Compliance
SOC 1 primarily focuses on internal controls related to financial reporting. This compliance standard is relevant for service organizations that directly interact with financial information for customers or partners. The SOC 1 report helps evaluate internal controls over financial reporting, thereby building customer trust and mitigating the risk of fraud or financial misstatements.
To achieve SOC 1 compliance, organizations must undergo a comprehensive process. This involves defining the program scope, conducting gap analysis, implementing necessary controls, and undergoing an official audit by INTERCERT. It demonstrates the commitment to maintaining the integrity and security of financial information. This compliance process is essential for service organizations handling financial data.
Understanding SOC 2 Compliance
SOC 2 focuses on evaluating the effectiveness of a company's security, availability, processing integrity, confidentiality, and privacy controls. This compliance standard is particularly relevant for organizations that handle sensitive or confidential data. This can include such as health tech companies or financial institutions. SOC 2 compliance helps organizations defend against cyber threats and also provides a competitive advantage by demonstrating robust information security practices to customers.
Achieving SOC 2 compliance involves adhering to the Trust Services Criteria, which encompass various principles related to security, availability, processing integrity, confidentiality, and privacy. Organizations must undergo a thorough audit process to assess their compliance with these criteria.
Key Differences Between SOC 1 and SOC 2 Compliance
While both SOC 1 and SOC 2 compliance frameworks aim to ensure organizational controls and practices, they differ in their focus, applicability, and compliance requirements. SOC 1 primarily addresses financial controls and applies to service organizations interacting with financial data, whereas SOC 2 focuses on security, availability, processing integrity, confidentiality, and privacy controls and is relevant for organizations handling sensitive data.
The Bottom Line!
SOC 2 and SOC 1 compliance is essential for organizations seeking to safeguard sensitive data and maintain trust with stakeholders. It is essential to understand the differences between these compliance frameworks and their respective requirements. This helps organizations to effectively prioritize their compliance efforts and demonstrate their commitment to data security and stakeholder trust. INTERCERT is a recognized certification institution that helps companies with auditing, certification, and training. We have employed a well-versed team that helps achieve your required compliance.