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SOC 2 gives businesses a clear, standardized way to show they handle sensitive information responsibly, without being boxed in by rigid rules.
Whether you’re chasing enterprise deals or scaling up, SOC 2 is no longer a “nice-to-have.” It’s the ticket to trust.
SOC 2 is a security framework developed by the American Institute of Certified Public Accountants (AICPA) that defines how service organizations should protect customer data. It evaluates controls across five Trust Services Criteria: security, availability, processing integrity, confidentiality, and privacy.
An independent licensed CPA firm conducts the audit and issues a report on whether the organization's controls meet those criteria.
For SaaS companies, cloud service providers, and any organization that stores or processes customer data, SOC 2 has become a standard requirement in enterprise procurement and vendor assessments.
This guide covers what SOC 2 is, how it works, what the audit process looks like, and what organizations need to do to get and stay compliant.
SOC 2 stands for System and Organization Controls 2. It is part of the broader SOC suite of reports developed by the AICPA, which also includes SOC 1 and SOC 3. SOC 2 was created in 2010 specifically to address information security controls at service organizations, as distinct from SOC 1, which focuses on financial reporting controls.
SOC 2 stands out because it’s an attestation-based framework, not a simple pass-or-fail certification like ISO/IEC 27001. Instead of just confirming compliance, SOC 2 reports evaluate how controls are designed, how mature they are, and whether they actually work in practice. That means two companies with SOC 2 reports can still show very different levels of real security.
Flexibility is another major difference. ISO 27001 prescribes 114 controls, while SOC 2 lets companies design controls based on the Trust Services Criteria they adopt. Security is mandatory, while the other principles depend on business needs. SOC 2 dominates the U.S., especially among SaaS and IT companies.
The Trust Services Criteria are the five areas an auditor evaluates during a SOC 2 examination. Security is the only mandatory criterion. The remaining four are included based on what's relevant to the services the organization provides.
The security criterion evaluates whether systems and data are protected against unauthorized access, misuse, and potential breaches. It covers access controls, network security, encryption, multi-factor authentication, and incident response. This is the foundation of every SOC 2 report and is referenced as the Common Criteria because many of its requirements apply across all five criteria.
Availability evaluates whether systems are accessible and operational as agreed upon in service level agreements. It covers uptime monitoring, disaster recovery, business continuity planning, and incident handling. It does not address system functionality or usability, only whether the system is accessible when it should be.
Processing integrity evaluates whether system processing is complete, valid, accurate, timely, and authorized. It is relevant for organizations where customers rely on the system to process transactions or deliver outputs correctly, such as payment processors or data transformation services. It does not address the integrity of data that was already incorrect before it entered the system.
Confidentiality evaluates whether data designated as confidential is protected appropriately throughout its lifecycle. This typically covers business data, intellectual property, financial information, and other sensitive information that is restricted to specific individuals or organizations. Controls include encryption, access restrictions, and data handling procedures.
Privacy evaluates how the organization collects, uses, retains, discloses, and disposes of personal information. It aligns with the AICPA's Generally Accepted Privacy Principles and is particularly relevant for organizations handling personal identifiable information (PII) or sensitive personal data such as health records, financial information, or demographic data.
A SOC 2 report is the document produced by the independent auditor after completing the examination. It describes the organization's systems and controls, details the tests the auditor performed, and provides an opinion on whether those controls meet the applicable Trust Services Criteria.
The report contains several standard sections: management's description of the system, the auditor's opinion letter, a description of the tests performed and their results, and any exceptions or findings.
Every organization that completes a SOC 2 audit receives a report regardless of outcome.
Auditors use four terms to describe their findings:
Unqualified: The organization passed. Controls are suitably designed and operating effectively.
Qualified: The organization passed with exceptions. Some areas need attention but overall controls are adequate.
Adverse: The organization failed. Controls are not suitably designed or not operating effectively.
Disclaimer of Opinion: The auditor did not have sufficient information to form a conclusion.
SOC 2 reports are confidential documents. They are typically shared with customers and prospects under NDA or through a secure portal rather than published publicly.
Both report types evaluate the same Trust Services Criteria but differ in what the auditor is testing and over what timeframe.
SOC 2 Type 1 evaluates whether controls are suitably designed at a specific point in time. It confirms that the right safeguards exist on a given date. Type 1 is faster to obtain and is sometimes used as an initial milestone when an organization needs to demonstrate security controls quickly.
SOC 2 Type 2 evaluates both the design of controls and their operating effectiveness over a defined observation period, typically a minimum of six months. It demonstrates that controls have been functioning consistently over time, which carries significantly more weight with customers and enterprise procurement teams.
Most enterprise customers require a Type 2 report. Type 1 is often treated as a stepping stone rather than a final destination, and some organizations skip it entirely and go straight to Type 2 to avoid duplicating the effort.
SOC 2 applies to service organizations that store, process, or transmit customer data. In practice this means SaaS companies, cloud service providers, data centers, managed IT service providers, HR platforms, and any other technology business whose services involve handling data on behalf of customers.
SOC 2 is not a legal requirement like HIPAA or GDPR, but it has become a commercial requirement for most companies selling into enterprise markets. Large organizations routinely require SOC 2 reports as part of their vendor assessment process, and deals are frequently blocked until a current report is provided.
Beyond closing deals, SOC 2 builds internal security discipline. The process of preparing for and maintaining compliance forces organizations to document controls, address gaps, and establish consistent security practices that hold up over time.
The first step is defining the scope of the audit. This means identifying which systems, services, and processes are in scope and which of the five Trust Services Criteria apply. Scope decisions directly affect the complexity and cost of the audit. Starting with only the Security criterion and a tightly defined system boundary keeps the initial audit manageable.
A readiness assessment is an optional but strongly recommended step where the organization reviews its controls against the SOC 2 criteria before engaging an auditor. This surfaces gaps early, when they are cheaper to fix, and reduces the risk of exceptions appearing in the final report. Some auditors offer readiness assessments as part of their engagement.
For Type 2 audits, controls must be in place and operating for a minimum of six months before the auditor begins testing. This observation period is what distinguishes Type 2 from Type 1 and is why Type 2 takes longer to obtain.
The auditor tests controls through document review, interviews with staff, and technical testing. For Type 2, they are evaluating whether controls operated consistently throughout the observation period, not just whether they exist on the day of the audit.
After completing the examination, the auditor produces the SOC 2 report. The timeline from the end of the observation period to report issuance typically takes several weeks to two months depending on the auditor and the complexity of the engagement.
SOC 2 reports are time-bound. A Type 2 report covers a specific period, typically twelve months, and customers expect a current report. Most organizations run their SOC 2 on an annual cycle, with the observation period and audit repeating each year.
The audit fee alone typically ranges from $10,000 to $50,000 depending on organization size, audit scope, and auditor choice. Total compliance costs including readiness work, remediation, tooling, and internal staff time typically land between $30,000 and $150,000 for most organizations pursuing their first Type 2 certification.
Annual maintenance costs are lower than the initial investment since controls are already in place, but ongoing monitoring, evidence collection, and the annual audit itself still represent a meaningful recurring spend.
A SOC 2 Type 1 audit typically takes two to three months from initial scoping to report issuance. A Type 2 audit requires a minimum six-month observation period before the formal examination begins, making the total timeline closer to nine to twelve months for organizations going through the process for the first time.
Organizations that use compliance automation platforms to streamline evidence collection and control monitoring can reduce the time spent on internal preparation significantly.
Both SOC 2 and ISO 27001 address information security controls but serve different markets and use different frameworks.
SOC 2 is an attestation issued by a CPA firm. It is most commonly required by customers in the United States and is widely recognized across North American enterprise procurement.
ISO 27001 is an international certification issued through accredited certification bodies. It is more widely recognized in Europe, Asia Pacific, and global enterprise markets. Certification involves implementing an Information Security Management System and passing a formal audit.
The two standards have significant control overlap, which means organizations often pursue both to satisfy different customer requirements without doubling all their compliance work.
SOC 3 covers the same Trust Services Criteria as SOC 2 but is a summarized version designed for public distribution. SOC 2 reports are confidential and shared under NDA. SOC 3 reports are simplified and can be published on a company's website for general audiences.
Most organizations with a SOC 2 report can also produce a SOC 3 at minimal additional cost, since the underlying audit work is the same.
SOC 2 is the standard most enterprise customers expect when evaluating whether a service provider can be trusted with their data. Getting certified is one thing. Maintaining the controls and evidence collection required to keep that certification current year over year is where the real operational work sits.
Uproot Security helps organizations build and maintain SOC 2 compliance continuously, with automated evidence collection, dedicated compliance expert support, and monitoring that keeps your controls audit-ready year-round. Book a demo today to see how it works.
Senior Security Consultant
