SOC3 Overview

What is a SOC Report? There are actually three types of SOC reports; SOC 1, SOC 2, and SOC 3. The first of the SOC reports, SOC 1, provides a formal audit of a company’s self‐imposed controls for financial transactions.

The shortfall with SOC 1 is that the relevance of the audit solely depends on the controls formulated and included by the service provider and the credibility of the auditor. With the emergence of new technology services and cloud computing entities, the need was recognized to protect against the over‐application of SOC 1 by standardizing the adherence to the industry standard Trust Services Principles, Security, Availability, Processing Integrity, Confidentiality and Privacy.

In recent years SOC 2 Type 2 has become the industry best practice for ensuring security of highly sensitive cloud‐hosted data. SOC 2 significantly expands on SOC 1 but may not be cost-effective for smaller organizations who are unable to readily meet the demands of the five Trust Services Principles and an in‐depth audit of their security protocols.