What’s The Difference Between SOC 2 and ISO 27001?

You’ve most likely arrived on this blog because you’re wondering what the difference is between SOC 2 and ISO 27001. I’m happy to tell you that you’ve come to the right place. Whether you’re hoping to identify which one makes the most sense for your organization or are simply trying to brush up on your understanding, I’ve got you covered. When it comes to determining if you should opt for SOC 2 or ISO 27001 compliance, it’s an and statement for some companies i.e., they need both SOC 2 and ISO 27001. However, it takes time, investment, and effort, so it’s an or question for most companies, i.e., “is it better for us to have SOC 2 or ISO 27001?”

In this blog, I’ll define SOC 2 and ISO 27001, indicate each differentiator, and provide some questions for you to ask to help determine which is better for your company.

What is SOC 2?

SOC 2 is a suite of reports produced during an audit, performed by an independent Certified Public Accountant (CPA) or accountancy organization.

The content of these reports is defined by the American Institute of Certified Public Accountants (AICPA) and, as such, is usually applicable to U.S. companies. SOC 2 validates internal controls related to information systems involved in provided services, based on five semi-overlapping categories called Trust Service Criteria (TSC):

• Security
• Privacy
• Availability
• Confidentiality
• Processing integrity

SOC 2 Differentiators

1. SOC 2 is primarily a US-based framework. The American Institute of Certified Public Accountants (AICPA) accredits the SOC 2 framework.
2. SOC 2 requires attestation by a licensed CPA firm. SOC 2 audits are conducted and licensed by third-party CPA firms that generate SOC 2 attestation reports.
3. SOC 2 audit reports typically cover:
   • Management assertion: confirmation and description of systems related to provided services
   • Auditor’s report: a summary of performed tests and results, and the auditor’s opinion of controls mapped to the Trust Services Criteria
   • Systems overview: descriptions of systems or services
   • Applicable Trust Services Criteria: acknowledgment of controls in place, in addition to controls effectiveness per the Trust Services Criteria. 
4. There are two types of SOC 2 reports. Depending on the goals of your organization there are two types of SOC 2 reports, Type 1 and Type 2.

What is ISO 27001?

ISO 27001 is a formal security certification and is considered one of the highest international security standards. Its coveted international stature means that attaining certification can facilitate business growth opportunities in the global market.

ISO 27001 provides a defining standard for protection requirements and controls for information (and systems). There are seven clauses (i.e., clauses four through 10) listed in ISO 27001:2013 version for establishing, implementing, and maintaining an organization's Information Security Management System (ISMS). 

ISO 27001 Differentiators

1. ISO 27001 is a standard. And can be certified by any ISO 27001 accredited organization.
2. Having ISO 27001 is not mandatory for businesses. However, its popularity has continued to grow significantly, making it an unwritten necessity.
3. ISO 27001 requires an Information Security Management System (ISMS). The ISMS focuses on securing information, reduces the risk of cyberattacks, helps understand threat landscapes, and protects confidentiality via policies, procedures, and technical controls.
4. To further support the requirements of ISO 27001, the standard also includes controls listed in Annex A. Annex A includes 114 suggested controls related to secure practices across a variety of categories such as encryption, asset management, and asset control.

Deciding Factors When Choosing SOC 2 or ISO 27001

Both SOC 2 and ISO 27001 provide significant advantages helping organizations to demonstrate control strength and effectiveness and gain a competitive edge. There is also a considerable benefit to achieving both, and as they grow, many companies will eventually need to get to this state. Organizations should review their needs and critical factors for their industry, region, customers, and partners to help determine what would be most fitting. Here are some questions to consider when determining which is the right one for your organization.

1. Where are your customers located? 
   • If your clients or customers are all in the US, SOC 2 will be more familiar with your client base. If your customers are based internationally, they will recognize ISO 27001.
2. Where do I need to highlight my control coverage?
   • SOC 2 focuses on security controls implemented to protect customer data, whereas ISO 27001 has a more operational view of the scope of controls required to protect an organization continuously.
3. What are your current time and monetary resources?
   • SOC 2 can take anywhere from six to 12 months
   • ISO 27001 takes a bit more work, six to 24 months, and tends to cost more
4. What kind of reports do you wish to provide your customers and partners?
   • A SOC 2 audit supplies an attestation Report
   • ISO 27001 provides audit reports and ISO certificate (if businesses pass)
5. How often do you need to show compliance?
   • Businesses should seek a new SOC 2 report every year, which means annual audits
   • ISO 27001 recertification happens every three years, with surveillance audits after years one and two in between recertification audits

Regardless of which audit makes the most sense for your organization, you’ll need a modern GRC platform to help you get the job done. Lucky for you, LogicGate’s Risk Cloud platform offers a SOC 2 Compliance Application and a Controls Management Application for your ISO 27001 needs to help you get started. Learn more at logicgate.com and request a demo today.

Learn how one LogicGate customer, Amount, used Risk Cloud to establish their own robust processes, gather evidence of controls, and attain Type 2, Soc 1, and 2 certifications. Read the full case study.

SOC 1®, SOC 2® and SOC 3® are registered trademarks of the American Institute of Certified Public Accountants in the United States. The AICPA Trust Services Criteria for Security, Availability, Processing Integrity, Confidentiality, and Privacy is copyrighted by the Association of International Certified Professional Accountants. All rights reserved.