ISO 27001 vs. SOC 2: Key Differences

Two of the world’s most popular standards for systems security come in the form of ISO 27001 and SOC 2. These two frameworks offer organisations a structure to gauge their internal system security, but each has a slightly different angle – so it’s important to know which to choose. Let’s discover whether ISO 27001 or SOC 2 is a better fit for you.

SOC 2

System and Organization Controls (SOC) 2 is a reporting framework composed of a set of system-level controls, derived from the Trust Services Criteria (TSC) of Security, Availability, Processing Integrity, Confidentiality, and Privacy. Note that unlike other criteria, only Security is required for all SOC2 reports. SOC 2 compliance reporting is designed for service organisations to demonstrate their level of services-based risk across these axes criteria to end-users, including business partners. SOC 2 is particularly applicable to service organisations handling sensitive data.

A SOC2 report includes a system description written by the organisation that summarises its services and controls implemented to satisfy the TSC relevant to the audit. This description is divided into 9 Description Criteria parts, namely:

1: Types of services provided

3: The components of the system used to provide services, including Each service system is comprised of infrastructure, software, people, procedures, and data.

The SOC 2 reporting framework is produced by the American Institute of Certified Public Accountants (AICPA).

The SOC ecosystem

SOC 2 sits alongside SOC 1, a reporting framework concerned with controls over financial reporting, and SOC 3, a reporting framework similar to SOC 2 but with a general public, audience rather than end-users.

AICPA also produce the SOC for Cybersecurity and SOC for Supply Chain reporting frameworks. For non-service-based organisations, or companies wanting to assess the wider organisation rather than a specific system, the SOC for Cybersecurity framework can be a better alternative from the suite.

SOC 2 audits

SOC 2 auditing is performed by a Certified Public Accountant (CPA) or other technically proficient auditor registered with AICPA. Only these individuals are permitted to perform the auditing and attestation activities associated with conducting a SOC 2 report.

There are two different types of SOC 2 audits to choose from, Type 1 and Type 2.

• A SOC 2 Type 1 audit is a snapshot evaluation of whether systems meet the controls at a specific point in time.
• A SOC 2 Type 2 audit is a lengthy audit of between six and twelve months that determines whether the systems meet controls in a full, ongoing, operational capacity. This type of report gives the full, true scope of an organisation’s compliance.

All SOC 2 reports cover the Security-level criteria, with the option to include any or all of the Availability, Processing Integrity, Confidentiality, and Privacy criteria.

ISO 27001

ISO 27001, or ISO/IEC 27001, is an international standard that outlines requirements on establishing, implementing, maintaining and continually improving an organisation’s Information Security Management System (ISMS). The most recent version of the standard is ISO 27001:2022, released in October 2022.

An organisation’s ISMS is the core of its cybersecurity program, and the ISO 27001 standard brings everyone into alignment, no matter your industry, organisation size, complexity, or mission.

ISO 27001 Clauses and Annex A Controls

ISO 27001 covers 10 Clauses, of which the back 7 cover system ISMS requirements: Context of the Organisation, Leadership, Planning, Support, Operation, Performance Evaluation, and Improvement.

Annex A of ISO 27001 covers the 93 prescribed risk managementinformation security controls necessary that may be used by the organisation for its ISMS complianceimplementation, under the categories of Organisational, People, Physical and Technological.

ISO 27001 External Audits

ISO 27001 External Audits are a point-in-time audit, carried out in two stages by:

• Stage 1: ISMS documentation review on the design of the ISMS and completeness of the required documentation.

Stage 2: On-site controls assessment including interviews, systems evaluation, etc. to evaluate effective implementation of the system and confirming if the organisation adheres to its own policies, objective and procedures.

Tesserent has a team of certified and experienced ISO 27001 Lead Auditors to help with internal ISO 27001 gap analysis and remediation activities and coordination of ISO 27001 Certification (valid for three years) and Surveillance Audits (annual compliance checks) through an accredited certification organisation.

Watch: Tesserent ISO 27001 Webinar

What do ISO 27001 and SOC 2 have in common?

ISO 27001 and SOC 2 share many overlapping benefits and control areas, so much so that certification in one will take you far if you want to achieve certification in both.

Common benefits of ISO 27001 and SOC2

Both standards share these common benefits:

• Offers peace of mind to partner organisations
• Keep up to date with security best practices
• Useful for public launches, acquisitions, mergers, etc.
• Improves the verified security level of internal systems

The main benefit of both standards is showing other, external parties that you take information e system security seriously.

Common areas of focus of ISO 27001 and SOC2

Both ISO 27001 and SOC2 typically cover the following controls:

• Risk management practices
• Access management practices
• Data security practices
• Physical security
• Staff training and management

Thanks to a similar architecture and controls, there is plenty of overlap between the two standards.

What is the Difference Between ISO 27001 and SOC 2?

While ISO 27001 and SOC 2 share a lot of commonalities, there are a few key differentiators that can help you decide which one is best for your organisation.

Focus and scope: ISO 27001 vs SOC2

The focus and scope of ISO 27001 is purely on your Information Security Management System (ISMS), whereas for SOC2, it is on the Security of a service-based system (and what supports that system), but may also include areas such as Availability, Processing Integrity, Confidentiality, and Privacy should you wish.

Organisation type

SOC2 reporting is purely for service-based systems within an organisation. For instance, if you are a SaaS provider, you might find SOC2 a good fit. ISO 27001 can be applied to organisations of all types and sizes; the standard is fully inclusive.

Style of audit

As the SOC2 is produced by an accountancy organisation, you’ll find the style of auditing in much the same style as you’d expect financial auditing. The ISO 27001 auditing process is somewhat more exploratory in nature.

Regional popularity

Typically, SOC2 reports are more widely asked for in the US, and ISO 27001 is better known internationally, including in Australia and Europe.

Which framework should you use?

Ultimately, your choice of framework should depend on your use case. If you are becoming serious about your cybersecurity program, you might choose to implement ISO 27001 to build out your ISMS but leave the actual certification process until later. If potential business partners keep asking to see your SOC2 accreditation, you might focus on attaining this to meet the demands of the market.

At Tesserent, leading cybersecruity provider in Australia we focus on helping our clients implement ISO 27001, as it is the most in-demand framework for Information Security Management Systems throughout ANZ. We can help with ISMS Internal Audits, ISO 27001 Gap Assessment and analysis, remediation, and certification and compliance activity supportties. Get in touch to learn how the ISO 27001 standard can help strengthen your organisation’s cybersecurity posture.