Which is better, SOC 2 or ISO 27001? This is a question that many high-growth companies face when deciding which type of compliance to use.
This question is difficult to answer, partly because the two structures are actually very similar.
Both are designed to demonstrate to customers that their data can be trusted. Both cover fundamental security principles such as data integrity, availability, and confidentiality. Both standards are respected around the world, both require independent audit by a certified third party, and both require significant time, effort and money to achieve.
Target market
If the majority of your customers are in the US, you should get a SOC 2 audit. SOC 2 Type II has become the industry standard for third-party reporting when it comes to US cybersecurity compliance.
If the majority of your customer base is outside of the US, you may be eligible for an ISO 27001 audit. ISO 27001 certification is the gold standard for meeting international information security standards.
However, many US companies will adopt ISO 27001 certification, and many companies outside the US will accept the SOC 2 report. Ultimately, this decision comes down to what your customers ask for during their supplier due diligence.
As your company grows, you will most likely decide to complete both audits in order to fully cover your customer base.
Application area
While you will need to implement internal controls for both SOC 2 and ISO 27001, ISO 27001 also requires that you have a plan to evaluate and improve your Information Security Management System (ISMS) over time.
Price
While costs vary from auditor to auditor, ISO 27001 certification can be more expensive than a SOC 2 report because ISO requires more documentation to prove SLA compliance. However, you can get a substantial discount if you decide to have both audits done by the same audit firm.
Audit Process
For both structures, companies must define their security objectives, conduct a gap analysis, implement the necessary controls, accumulate documentation, and establish a method for reviewing and continuously improving security processes.
However, the requirements for experts are different. SOC 2 audits must be conducted by licensed CPAs and an ISO 27001 accredited registrar must issue an ISO 27001 certification.
In addition, Type 2 SOC 2 reports generally need to be updated annually. Most ISO 27001 certifications are valid for three years, with periodic audits at the end of the first year and renewals for the second and third years.
Audit time
ISO 27001 certification usually takes longer than SOC 2 audit.
For a SOC 2 Type I report, preparing for an audit takes an average of 3 months of preparatory work. After preparing for the audit, it takes about 2 months to conduct the audit and get the report in hand for both.
For a SOC 2 Type II report, preparing an audit can take an average of 4 months. Once prepared, the audit estimate can take anywhere from 3 to 12 months depending on the desired audit window. Once the audit window has been completed, it may take an additional month to review any follow-up and receive a report.
For ISO 27001 certification, readiness for audit takes an average of 4 months. After preparing for the audit, it takes an average of 6 months to pass audits of stages 1 and 2 (eliminate the gaps between them) and receive a report.
Both SOC 2 and ISO 27001 take a significant amount of time to create and implement the right policies, processes, and controls for your company.
Report Type
While both security standards require external auditing, audit results differ.
Only ISO 27001 implies actual certification. Upon completion of the audit, the auditor issues a certificate of compliance, which confirms that the organization complies with the requirements of the International Organization for Standardization (ISO) in relation to information security and risk management.
The outcome of a SOC 2 audit is an attestation report that details the auditor's opinion on whether the organization meets the relevant Trust Services security criteria.
SOC 2 and ISO 27001: which is best for your company?
Both SOC 2 and ISO 27001 are respected security systems that will build customer confidence in your organization's security. Both require significant effort in terms of time, money and effort to achieve. Both will help provide your organization with best-in-class security practices.
So, which is better for your company, ISO 27001 or SOC 2 compliance?
The short answer is that it really depends on your customers.
The most important factor when choosing between SOC 2 and ISO 27001 comes down to the expectations and requirements of your target market. What are your clients asking for?
Many organizations see value in achieving both SOC 2 reporting and ISO 27001 certification, especially as many requirements and controls overlap. According to the AICPA SOC 2 and ISO 27001 Compliance spreadsheet, the criteria for SOC 2 and ISO 27001 are approximately 80% identical.
Meeting the requirements of both frameworks demonstrates a deep commitment to security and earns the trust of customers around the world.