SOC 1 vs SOC 2
Which Attestation Does Your Organization Need?

SOC 1 evaluates controls relevant to user entities’ Internal Control over Financial Reporting (ICFR). It answers the question: could this service organization distort my financial statements? SOC 2 evaluates controls against the AICPA Trust Service Criteria — Security, Availability, Processing Integrity, Confidentiality, and Privacy. It answers: is this vendor protecting my data and systems? Different audience, different controls, different purpose.

Yes, and it is common. A payroll SaaS company, for example, processes salary disbursements that directly affect clients’ financial statements (SOC 1 territory) while also storing sensitive employee PII that enterprise HR buyers want protected (SOC 2 territory). Payment processors, benefits administrators, and fund administrators frequently hold both reports.

In the United States, SOC 1 is governed by SSAE 18, specifically AT-C Section 320 ("Reporting on an Examination of Controls at a Service Organization Relevant to User Entities’ Internal Control Over Financial Reporting"). Internationally, the equivalent standard is ISAE 3402, issued by the International Auditing and Assurance Standards Board (IAASB).

SOC 2 is governed by the AICPA Trust Service Criteria (TSC), which map to the 2013 COSO Internal Control — Integrated Framework. The attestation engagement itself follows SSAE 18 AT-C Section 205 ("Examination Engagements"). The five Trust Service Criteria — Security, Availability, Processing Integrity, Confidentiality, and Privacy — define the control points the CPA firm tests.

SOC 1 reports are primarily consumed by user auditors — the external auditors of the service organization’s clients who need assurance that outsourced processes do not introduce material misstatement risk. SOC 2 reports are consumed by enterprise procurement teams, chief information security officers (CISOs), and vendor-risk-management functions during due diligence.

No. Both SOC 1 and SOC 2 reports are restricted-use documents, typically shared under NDA. SOC 1 reports go to user entities and their auditors. SOC 2 reports go to existing and prospective customers, regulators, and business partners. Neither is listed in a public registry. A SOC 3 report (a derivative of SOC 2) is the public-facing alternative, but it lacks the detailed control descriptions and test results.

SOC 1 covers security controls only to the extent they are relevant to ICFR. For example, logical access controls preventing unauthorized modification of financial data are in scope. However, SOC 1 does not systematically evaluate security, availability, or privacy the way SOC 2 does through the Trust Service Criteria. If your clients need broad security assurance, SOC 2 is the right report.

A coordinated dual-attestation engagement typically costs 25–35% less than running two separate engagements. Indicative ranges: SOC 1 Type II CPA fees ($30K–$60K) + SOC 2 Type II CPA fees ($25K–$50K) with a bundled discount. Implementation consulting fees are also lower because overlapping controls (access management, change management, monitoring) are designed once. Tranquility Cybersecurity offers offshore advisory delivery that further reduces the consulting component.

If starting from scratch, plan for 4–6 months of implementation work followed by a 6–12 month Type II observation period. The two observation windows run concurrently, so you do not double the calendar time. Total timeline from kickoff to two issued Type II reports: approximately 12–18 months. Organizations with mature controls can accelerate this significantly.

No. SOC 1 and SOC 2 attestation reports can only be issued by a licensed, independent CPA firm. Tranquility Cybersecurity serves as the implementation and advisory partner — we handle scoping, gap analysis, control design, policy documentation, evidence preparation, and CPA coordination. The attestation itself is performed by an independent CPA firm to maintain auditor independence as required by AICPA professional standards.