Over 50,000 SOC 2 and ISO 27001 Security Certificates have been issued globally. Although there's an 80% overlap between them, they serve slightly different business needs.
Failing to be proactive about security certification can damage your business when you meet a client who will refuse to do business without it. I've witnessed organisations scrambling desperately to get ISO or SOC at very short notice and losing business.
Over the past 15 years, I've helped organisations get certified and worked on government military projects where security is paramount.
So, if you are here to answer the question,
What are the main differences between ISO 27001 and SOC 2?
You are in the right place. This article will help you;
Understand the differences and similarities.
Help you decide which is suitable for your organisation.
Why you might use one, the other or both.
Introduction to ISO 27001 vs SOC 2
Among the leading frameworks designed to safeguard and protect sensitive information and data, ISO 27001 and SOC 2 are benchmarks for establishing, implementing, maintaining, and continuously improving information security management systems.
While both standards aim to enhance data security, they cater to different needs and compliance requirements, choosing between them a significant strategic decision for organisations.
ISO 27001, part of the ISO family of standards, is an international standard that specifies the requirements for an information security management system (ISMS).
ISO 27001 provides a systematic approach to managing and protecting company and customer information through risk management and security controls. Implementing robust security controls is essential in achieving compliance with ISO 27001, as these measures directly impact the organisation's ability to safeguard sensitive information.
On the other hand, SOC 2 (Service Organization Control 2) is a framework designed by the American Institute of CPAs (AICPA) that focuses on non-financial reporting and organisational controls related to a system's security, availability, integrity, confidentiality, and privacy.
Understanding the nuances, benefits, and challenges associated with ISO 27001 and SOC 2 is crucial for organisations to make informed decisions that align with their operational objectives and compliance obligations.
This article aims to navigate the intricate landscape of these security standards, providing insights into their basics, key differences, and how to choose the right framework for your organisation's security objectives and specific needs.
Feature | ISO 27001 | SOC 2 |
Scope | Global | Primarily US, but recognized internationally |
Focus | Comprehensive info security management | Controls related to security, privacy, and more |
Type | Certification | Attestation report |
Framework vs Standard | Standard | Framework |
Applicability | Any organization | Service organizations, especially cloud services |
Compliance | Certification by an accredited body | CPA or CPA-qualified auditors report |
Objective | Manage and protect company and customer info | Protect customer data |
Cost | Varies widely, often significant | Varies widely, often significant |
Legal Requirement | Not legally required, but may be contractually | Not legally required |
GDPR Coverage | Complements GDPR compliance | Supports GDPR compliance efforts |
Audit Scope | A comprehensive, risk-based approach | Focus on five trust service criteria |
Recognition | Internationally recognized | Recognized in the US, growing internationally |
ISO 27001: A Global Information security management system
ISO 27001 is an internationally recognised standard that provides an Information Security Management System (ISMS) blueprint. Its universality comes from its applicability to any organisation, regardless of size, type, or nature, and can be adapted to fit.
Organisations strive to achieve compliance with ISO 27001 as a testament to their rigorous approach to information security and risk management.
Achieving ISO 27001 certification demonstrates an organisation's commitment to management, stakeholders, customers, and regulatory authorities. It requires ongoing rigorous external audits by an accredited certification body, ensuring that the organisation meets the standard's extensive criteria.
ISO is less about stringently laying out technical security controls, and more about policies and procedures. It expects to see some mandatory documents but is more prompting, asking, 'How do you handle access control?' rather than specifying exactly how you should.
At its core, ISO 27001 focuses on a risk-based approach towards security, which requires organisations to identify, assess, and treat security risks within the context of their overall business risks.
The standard has a comprehensive audit scope, covering more than just IT or cyber security. It encompasses employee security, physical security, and access controls, among other things.
ISO 27001's adaptability allows organisations to tailor the ISMS to their needs. It provides a structured framework for securing information in all forms, including digital, paper-based, or cloud-based. If part of the controls or standard does not apply to your organisation, you can specify that in its context and keep it out of scope.
Many customers will actively seek out ISO 27001 as part of their audit checklist for new suppliers. So, while it might not hinder you now, if you start working with banks, governments and larger organisations, they may expect you to have certification so that they can be confident in your approach to handling their sensitive data.
Takeaways:
ISO 27001 is an ongoing security certification.
It is an internationally established standard overseen by the ISO.
The scope is adaptable to the context of the organisation.
ISO is less prescriptive about technical controls and focuses on policy and procedural controls.
SOC 2: Tailored for Service Organisations
SOC 2, developed by the AICPA, is specifically designed for service organisations, particularly those storing customer data in the cloud.
Unlike ISO 27001, SOC 2 is not a certification but an attestation report that provides detailed information for customer confidence and assurance about the controls at a service organisation relevant to security, availability, integrity, confidentiality, or privacy to protect customer data.
SOC 2 reports are unique to each organisation and built around five trust service criteria developed by the AICPA. Clients and partners often require these reports to demonstrate the service provider's commitment to controlling their information systems and data.
There are two types of SOC 2 reports:
Type I, which evaluates the design and operating effectiveness of security processes at a specific point in time,
Type II examines the effectiveness of those controls over a defined period.
While the SOC 2 compliance standard is more prevalent among technology and cloud computing companies in North America, its relevance is increasingly recognised globally, especially by organisations that handle significant amounts of sensitive customer data.
Takeaways:
SOC 2 is a US compliance report from the American Institute of Certified Public Accountants (AICPA)
SOC 2 Type I reports assess controls at a moment in time, and Type II evaluate effectiveness over a period of time.
It is particularly relevant to cloud-based technologies (e.g. data centres and SaaS providers).
It is of primary relevance to North America but growing internationally.
Major Differences Between Soc 2 and ISO 27001
Understanding the distinctions and overlaps between ISO 27001 and SOC 2 is essential for organisations to decide which standard best aligns with their needs and client expectations.
1. Geographical Recognition and Applicability
ISO 27001 is recognised globally and applicable to any organisation, industry, or sector. Its international acceptance makes it a versatile standard for businesses operating in multiple countries.
SOC 2 is predominantly recognised in the United States and tailored for service organisations, especially those engaged in cloud-based services. However, its relevance is expanding as global markets increasingly integrate cloud services.
2. Framework and Focus
ISO 27001 offers a comprehensive framework for a security management system that includes policies, procedures, and controls to manage risks to information security. It emphasises a risk management process and requires the implementation of specific controls listed in Annex A (called the Statement of Applicability), albeit with the flexibility to exclude controls that are not relevant.
SOC 2 focuses on five trust service criteria: security, availability, integrity, confidentiality, and privacy. It's more prescriptive about the controls for these areas, providing detailed descriptions of how organisations should handle them. SOC 2's emphasis on the design and effectiveness of security controls within these criteria ensures that organisations have solid data security practices.
3. Certification vs. Report
ISO 27001 results in certification after a successful audit by an accredited certification body, verifying that the organisation's ISMS meets the standard's requirements.
SOC 2 produces a detailed report rather than a certification. The report, prepared by a CPA, evaluates the organisation's systems and processes against the trust service criteria relevant to its services.
4. Audit and Assurance
ISO 27001 audits are conducted by independent and accredited certification bodies, leading to a three-year certification with periodic surveillance audits.
SOC 2 audits are performed by CPAs or firms with CPA-qualified auditors, resulting in Type I or Type II reports. Type II reports, which assess the operational effectiveness of controls over time, offer a more dynamic insight into the organisation's ongoing compliance.
Similarities
Despite their differences, ISO 27001 and SOC 2 share a fundamental goal: to safeguard information by implementing robust information security measures.
Both standards recognise the importance of continuous improvement and involve regular reviews and updates to security practices.
They also require organisations to consider information security in all forms, not just digital, and to involve the entire organisation in security efforts from top management down.
Audit Process, Timeline, and Compliance for ISO 27001 and SOC 2
Audit Process and Timeline
ISO 27001 Audit: The audit process for ISO 27001 certification typically involves two main stages: the Stage 1 audit (documentation review) and the Stage 2 audit (main audit). The entire process, from initial planning to certification, can take several months to a year, depending on the organisation's readiness and the scope of the ISMS.
SOC 2 Audit: SOC 2 audits are performed by CPA firms and can be either Type I or Type II. A Type I audit assesses the design of controls at a specific point in time, while a Type II audit evaluates the operational effectiveness of controls over a specified period, usually at least six months. The timeline for a SOC 2 audit varies based on the type of report and the organisation's preparedness.
ISO 27001 Certification Process
Achieving ISO 27001 certification involves several key steps:
Preparation: This involves understanding the standard's requirements, conducting an initial review of the current ISMS, and planning the implementation process.
Scope Definition: Organisations must define the scope of the ISMS, identifying which parts of the business will be covered by the certification.
Risk Assessment: A comprehensive risk assessment is conducted to identify potential information security risks within the scope.
Implement Controls: Based on the assessment of risk, organisations implement the necessary controls from Annex A of ISO 27001, tailored to their specific risks and requirements. Annex A is also known as the Statement of Applicability and is often a spreadsheet of controls for which the organisation must respond on how they are addressed, or if not, why not.
Documentation: Developing an ISMS policy and documentation is crucial, including policies, procedures, and records demonstrating compliance with the standard.
Internal Audit: Before the certification audit, an internal audit is conducted to ensure that the ISMS complies with ISO 27001 and functions effectively.
Certification Audit: Conducted by an accredited certification body, this two-stage audit assesses the ISMS against the standard's requirements.
Continuous Improvement: Once certified, organisations must continually monitor, review, and improve their ISMS with annual surveillance audits.
SOC 2 Certification Process
SOC 2 compliance involves a somewhat different approach, focusing on preparing for and undergoing a SOC 2 audit:
Understanding SOC 2 Requirements: Organisations must first understand the applicable trust service criteria and how they relate to their services.
Pre-assessment: Conducting a pre-assessment or gap analysis to identify areas that do not meet SOC 2 criteria.
Implement Controls: Based on the gap analysis, organisations implement or enhance controls to meet the trust service criteria.
Documentation: Documenting policies, procedures, and controls that address the relevant trust service criteria is crucial for demonstrating compliance.
SOC 2 Audit: Organisations engage a CPA or a firm with CPA-qualified auditors to conduct the SOC 2 audit. The audit can be either Type I, assessing the design of controls at a specific point in time, or Type II, evaluating the effectiveness of controls over a period.
Report: The auditor produces a SOC 2 report detailing the effectiveness of the controls in meeting the trust service criteria.
Managing Compliance and Audits
Organisations can streamline their internal controls, compliance and audit processes by:
Conducting Regular Internal Reviews: Periodic internal audits and reviews can help identify gaps in compliance and address them proactively.
Leveraging Technology: Implementing compliance management software or tools can help manage documentation, control assessments, and evidence collection more efficiently.
Engaging with Experienced Auditors: Working with auditors who have experience in your industry can provide insights into best practices and common pitfalls to avoid.
Fostering a Culture of Security: Encouraging a security-minded culture within the organisation can help ensure that policies and controls are effectively implemented and maintained.
Use Cases for ISO 27001 and SOC 2
ISO 27001 Use Cases
Global Operations: For organisations trading internationally, ISO 27001's global recognition makes it a preferred choice for standardising information security practices across borders.
Comprehensive Information Security Management: Companies are looking for a holistic approach to managing information security that includes not just IT security but also physical security, employee awareness, and third-party risk management.
Regulatory Compliance: Organisations in industries regulated by stringent data protection laws (such as finance, healthcare, and public services) often find that ISO 27001 helps meet legal and contractual requirements.
SOC 2 Use Cases
Cloud Service Providers: SOC 2 is particularly relevant for technology and cloud service providers needing to demonstrate their commitment to the security, availability, and processing integrity of the systems they use to process users' data.
U.S. Market Compliance: Businesses primarily operating in or targeting the US market may find SOC 2 more recognised and requested by their clients and partners.
Focus on Privacy and Confidentiality: Companies prioritising confidentiality and privacy of customer data, especially when handling large volumes of personal information, can leverage SOC 2 to showcase their dedication to these principles.
Choosing the Right Framework: ISO 27001 vs SOC 2
It's not really ISO 27001 vs SOC 2; it's about considering several factors specific to an organisation's operational, market, and regulatory environment. Here are some considerations to guide this decision:
Market and Geographic Presence: If your organisation operates or plans to operate globally, ISO 27001's international acceptance may offer broader benefits. For companies focused on the US market or in the cloud services sector, SOC 2 may be more applicable.
Scope of Information Security Needs: ISO 27001's comprehensive framework is well-suited for organisations seeking a complete ISMS that integrates all aspects of information security. SOC 2's focus on specific trust service criteria makes it ideal for service organisations concerned with demonstrating controls around the security, availability, and confidentiality of their customer data.
Client and Partner Expectations: Understanding the information security standards your clients or partners expect you to comply with is crucial. Customer requirements or industry trends can significantly influence the choice between ISO 27001 and SOC 2.
Resource and Time Investment: Both standards require time and resources, but the scope of your ISMS and the specific trust service criteria relevant to your operations can affect the complexity and length of the preparation and audit process.
Ultimately, some organisations may find value in pursuing both ISO 27001 and SOC 2 to cover all bases of information security and meet diverse client expectations.
The decision should align with the organisation's strategic objectives, customer needs, business continuity, and regulatory requirements.
Can ISO 27001 and SOC 2 Work Together?
Yes, ISO 27001 and SOC 2 can complement each other to provide a comprehensive approach to information and security compliance. Organisations that choose to comply with both standards can benefit from:
Enhanced Credibility: Complying with ISO 27001 and SOC 2 demonstrates a strong commitment to information security, enhancing credibility with clients, partners, and regulatory bodies.
Comprehensive Security Measures: While ISO 27001 provides a broad framework for an ISMS, SOC 2 offers specific controls around the trust services criteria. Together, they ensure a more comprehensive approach to securing information.
Efficient Resource Utilisation: By harmonising the compliance efforts for ISO 27001 and SOC 2, organisations can make more efficient use of resources and avoid duplication of efforts in areas where the standards overlap.
Leverage Commonalities: Both standards emphasise risk management, information security, and continuous improvement. Organisations can build a comprehensive ISMS that addresses the requirements of both standards, optimising efforts and resources.
Streamline Audits: By aligning the ISMS with both ISO 27001 and SOC 2 requirements, organisations can streamline audit processes, making external assessments more efficient and less disruptive.
Organisations can leverage the strengths of both ISO 27001 and SOC 2 to build a robust information security management system that meets compliance requirements and significantly improves the overall effectiveness of their overall data security framework.
Harmonizing ISO 27001 and SOC 2 compliance efforts saves time and resources and enhances the organisation's security posture and credibility, offering a competitive edge in the market.
Conclusion
In the quest to ensure data security, many organisations must choose a security standard that aligns with their needs.
ISO 27001 and SOC 2 emerge as leading frameworks, each offering unique advantages tailored to organisational needs.
Key Takeaways
ISO 27001 offers a comprehensive, risk-based approach to information security management applicable across global operations, making it ideal for organisations seeking a universally recognised certification.
SOC 2 focuses on specific trust service criteria, making it particularly relevant for service organisations, especially those in the cloud services domain, who aim to demonstrate their commitment to customer data security, availability, integrity, confidentiality, and privacy.
While ISO 27001 leads to a certification following a successful external audit, SOC 2 results in a detailed report that provides assurance about the controls related to the trust service criteria.
Both standards are not mutually exclusive and can be harmonised to leverage their strengths, providing a robust framework for information security.
FAQs on ISO 27001 vs SOC 2
What's the key difference between ISO 27001 and SOC 2?
ISO 27001 is a global standard for information security management applicable to all organisations, leading to certification. SOC 2 is a compliance framework for service organisations focusing on data security and privacy controls, resulting in a detailed report.
Is SOC 2 recognised in the UK?
Yes, SOC 2 is recognised in the UK, particularly by firms dealing with US companies, but ISO 27001 is more prevalent due to its global market applicability.
Are ISO and SOC the same?
No, ISO 27001 is an internationally recognised standard for managing information security, while SOC 2 is a compliance framework for service organisations focusing on information security controls.
Why might ISO 27001 not be sufficient?
ISO 27001 may not meet specific client or market demands, such as in the US, where SOC 2 is often required for cloud service providers.
What is the overlap between ISO 27001 and SOC 2?
There's about an 80% overlap, mainly in risk management and information security practices and policies, allowing significant overlap for synergies in compliance efforts.
Is SOC 2 a standard or framework?
SOC 2 is a compliance framework designed by the AICPA for service organisations.
Does SOC 2 cover GDPR?
SOC 2 doesn't explicitly cover GDPR but can support GDPR compliance efforts, particularly around data privacy.
Is SOC 2 legally required?
SOC 2 is not a legal requirement but a framework many organisations use to demonstrate compliance with information security controls, often required by clients or partners.
How much does SOC 2 cost?
SOC 2 costs can range widely, from tens to over a hundred thousand dollars, based on organisation size, complexity, and audit scope.
How much does ISO 27001 cost?
ISO 27001 certification costs vary significantly based on size, complexity, and the current security posture, including consultancy, audit, and ongoing surveillance costs.
Further Reading
Delve into the critical distinctions between ISO 27001 and SOC 2, covering aspects such as scope, certification processes, and market applicability. Understanding these differences is crucial for selecting the right framework for your business needs.
This resource succinctly explains that SOC 2 involves audit reports to demonstrate conformity to specific criteria, while ISO 27001 establishes requirements for an Information Security Management System (ISMS). Additionally, it highlights geographical applicability and industry relevance.
Learn about SOC 2 (Service Organization Control 2), a flexible auditing standard that focuses on five Trust Services Criteria (TSCs): security, availability, processing integrity, confidentiality, and privacy. This guide provides valuable insights for organizations seeking to enhance their security posture4.
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