Blog Compliance The difference between SOC 2 and ISO 27001: Choosing the right standard Both SOC 2 and ISO 27001 set high standards in the realm of information security, each offering a structured approach to safeguarding sensitive data. Service Organization Control 2 (SOC 2), developed by the American Institute of Certified Public Accountants (AICPA), focuses on protecting customer data through Trust Services Criteria and ensuring that organizations implement controls. On the other hand, ISO 27001, an international standard published by the International Organization for Standardization (ISO), provides a comprehensive framework for managing an Information Security Management System (ISMS), covering a broad spectrum of information security aspects. Despite their voluntary nature, adherence to one—or both—of these standards can be a significant competitive advantage, demonstrating a commitment to robust data security practices. Though different in their approach, SOC 2 and ISO 27001 both strive to protect sensitive customer information and manage information security risks effectively. Key takeaways SOC 2 and ISO 27001 are both recognized standards for ensuring information security. SOC 2 focuses on organizational controls related to specific Trust Services Criteria, while ISO 27001 provides a comprehensive framework for managing an ISMS. Key differences between SOC 2 and ISO 27001 include their scope and focus, audit processes, and flexibility of requirements. SOC 2 allows for more customizable controls, while ISO 27001 demands adherence to all controls in Annex A. Due to the overlap in many of their security controls, achieving both SOC 2 and ISO 27001 certifications can offer significant benefits, such as a comprehensive security posture, a competitive edge in the market, and streamlined compliance. Understanding SOC 2 and ISO 27001 Before we discuss the differences between SOC 2 and ISO 27001, let’s establish what each framework is and the standards it sets. What is SOC 2? Service Organization Control 2, commonly known as SOC 2, is a framework for service organizations to safeguard customer data by adhering to five primary Trust Services Criteria: Security Availability Processing Integrity Confidentiality Privacy The American Institute of Certified Public Accountants (AICPA) created this standard with the main intention of protecting client information within these organizations. The cornerstone of SOC 2 lies in its organizational controls related to these criteria, which are vital for ensuring customer data is handled correctly. This serves as a benchmark that reaffirms an organization’s commitment to secure management and protection of their clients’ data. SOC 2 distinguishes itself through its adaptability, which allows enterprises to tailor-make their control mechanisms according to their needs. What is ISO 27001? ISO 27001 is an international standard for the development, implementation, continuous improvement, and management of an information security management system (ISMS) across a number of assets, including: Financial information Employee data Intellectual property Third-party data ISO 27001 was produced by the International Organization for Standardization (ISO) with collaborative efforts from the International Electrotechnical Commission (IEC). This standard encompasses a wide range of aspects pertaining to information security, including: Availability: Ensuring only authorized users can access data Confidentiality: Safeguarding corporate data by limiting access Integrity: Placing further restrictions on the ability to edit or make changes to information Organizations seeking ISO 27001 certification must undergo a comprehensive audit process to verify adherence to its detailed criteria. Maintaining this certification necessitates establishing a compliant ISMS complete with various applied security controls, which must be regularly audited for effectiveness. By committing to adhere to ISO 27001 standards, organizations signal their strong commitment to maintaining robust defenses against information security risks. They thereby ensure they have in place the best practices necessary for protecting sensitive information within their purview. Three key differences between SOC 2 and ISO 27001 Both SOC 2 and ISO 27001 are designed to protect sensitive data but vary in their emphasis, coverage, and demands. The primary distinction lies in their scope: ISO 27001 aims to provide a comprehensive framework for organizations to manage their data and demonstrate that they have a fully functional ISMS in place, which includes incorporating all of its listed Annex A’s 93 controls. SOC 2 focuses more specifically on proving that an organization has implemented essential data security controls. 1. Scope and flexibility (security controls) SOC 2 provides a flexible compliance structure that mandates security as a fundamental requirement while allowing adjustments tailored to the Trust Services Criteria (Security is the only mandatory criterion.) This adaptability is advantageous for service organizations that wish to demonstrate their tailored security practices to clients. On the other hand, ISO 27001 necessitates an exhaustive strategy toward information security by mandating all of its listed 93 controls in Annex A, which fall under four control themes: Organizational controls: At the foundation of an organization’s data protection efforts are organizational controls which dictate its strategic formation along with policy-making and procedural execution. Number of controls: 37 Control numbers: ISO 27001 Annex A 5.1 to 5.37 Human resources (people) controls: Controls related to people ensure that there is clear communication about individual responsibilities regarding secure handling and protection of information assets. Number of controls: 8 Control numbers: ISO 27001 Annex A 6.1 to 6.8 Physical controls: Security measures concerning physical premises deal with protecting locations where sensitive information resides. Number of controls: 14 Control numbers: ISO 27001 Annex A 7.1 to 7.13 Technological controls: Technological controls focus specifically on employing advanced technical strategies and tools to shield digital data from threats. Number of controls: 34 Control numbers: ISO 27001 Annex A 8.1 to 8.34 There are also 7 clauses (or requirements) listed in ISO 27001 —clauses 4 through 10 for establishing, implementing, maintaining, and continually improving the ISMS: Clause 4: ISMS Organization and Context Clause 5: Commitment and Leadership Clause 6: Risk Planning Clause 7: Communication and Resources Clause 8: Operational Risk Assessment and Remediation Clause 9: Monitoring and Evaluation Clause 10: Continual Improvement Unlike SOC 2, these requirements are prescribed, so organizations cannot pick and choose which standards are applicable to them. Such thoroughness guarantees comprehensive management of information security risks and furnishes organizations with a solid framework designed for the systematic protection of diverse types of sensitive data. 2. Audit process The audit process for SOC 2 and ISO 27001 exhibits notable differences. Licensed CPA firms perform SOC 2 audits, which are divided into Type 1 and Type 2 reports. A SOC 2 Type 1 (Type I report) audit tests the design of your compliance program. It assesses your compliance at one point in time. Typically, this involves checking to see that you’ve identified and documented the controls you have in place, as well as providing sufficient evidence that your controls are functional at that point in time. A SOC 2 Type 2 (Type II report), on the other hand, tests not only your compliance program but also the operating effectiveness of controls over time. Usually, a Type 2 audit assesses your compliance over a six to 12-month review period, with your first audit typically lasting up to six months. Learn more SOC 2 Type 1 vs Type 2 reports. Continued Reading Data security and SOC 2 user control considerations Learn More icon-arrow-long In contrast, ISO 27001 demands a certification process with several distinct phases. The commencement of a formal internal audit A review by management An initial Stage One audit followed by the Stage Two evaluation Periodic surveillance audits to ensure ongoing compliance Audits for recertification This meticulous scrutiny confirms that an organization’s Information Security Management System (ISMS) is properly established and sustained over its lifespan. 3. Reach / international applicability SOC 2, developed by the American Institute of Certified Public Accountants (AICPA), is predominantly recognized within North America. Despite not being a global standard per se, its stringent requirements and comprehensive nature have led many international companies, particularly those engaging with U.S.-based clients or striving to build a high level of trust, to adopt SOC 2 compliance. Here at Thoropass, we recommend SOC 2 for most U.S. companies, particularly SaaS startups. SOC 2 is the current standard for domestic operations, but if your business is majority-based internationally or targets international customers, you should pursue ISO 27001. When considering the reach and international applicability of these standards, ISO 27001 is a more globally recognized benchmark for information security. It is an ideal choice for organizations aiming to establish an Information Security Management System (ISMS) or those serving international clients. The universal acceptance of ISO 27001 certification across various industries and regions underscores its widespread credibility and applicability. Three similarities between SOC 2 and ISO 27001 Although SOC 2 and ISO 27001 vary in certain respects, both frameworks converge on key aspects that highlight their critical role in the realm of information security. They are designed to demonstrate a firm’s capability to protect customer data, which fortifies cyber defense mechanisms and bolsters protection for customer information. Core security concepts addressed by both standards include: Ensuring data remains secure Maintaining integrity Keeping data accessible as needed Preserving confidentiality The security controls within SOC 2 and ISO 27001 exhibit considerable congruence. 1. Control overlap The security controls prescribed by ISO 27001 and SOC 2 have a significant degree of convergence, with roughly an 80% overlap suggested by the AICPA’s mapping spreadsheet. This implies that adherence to either one of these standards facilitates compliance with the other due to their substantial similarities in requirements. Executing controls for ISO 27001 can considerably simplify the pathway toward meeting the criteria set forth by SOC 2, and vice versa. 2. Third-party validation Certified professionals, who are independent third parties, must carry out audits for both SOC 2 and ISO 27001 compliance to bolster trustworthiness and confirm the organization’s conformity claims. Licensed CPA firms conduct a SOC 2 attestation report audit, whereas an accredited registrar is responsible for auditing in order to award ISO 27001 certification. Such third-party validation plays an essential role in evaluating the methods and controls that organizations use to handle and safeguard data. 3. Building trust with stakeholders and customers Adhering to ISO 27001 and SOC 2 enhances the credibility of an organization, fostering trust among stakeholders, customers, and partners regarding the strength of its security protocols. Obtaining these certifications can position organizations favorably in a competitive landscape by showcasing their dedication to maintaining elevated levels of security standards. Choosing between SOC 2 and ISO 27001 The choice between SOC 2 and ISO 27001 hinges on a few things, including the intended market, organizational objectives, and client requirements. Both frameworks have their own merits and are acknowledged distinctly across diverse industries and geographical locations. In general, U.S. companies, particularly enterprises, prefer their vendors have a SOC 2 in place before working with the company. International companies lean toward ISO 27001, which is also better suited for integrating ISO 27701 and the General Data Protection Regulation (GDPR) in Europe. Target market Primarily acknowledged in North America, especially within the U.S., SOC 2 is frequently sought after by clients. Conversely, ISO 27001 garners worldwide recognition and tends to be the standard of choice in areas beyond North America. Grasping your target market’s regional preferences can help you select a suitable standard that aligns with those preferences. However, since they have such similarities and fundamentally showcase a commitment to mitigating risk and implementing security best practices, oftentimes companies will accept either. Business objectives If the core of your business strategy and security goals is to uphold stringent controls and data integrity, ISO 27001 could be more appropriate. It provides a robust Information Security Management System (ISMS) framework that signifies a deep commitment to protecting data. Pursuing ISO 27001 involves higher expenses for certification, auditing, and maintaining compliance, but ensures a resilient system for managing security. Conversely, SOC 2 may align better with companies aiming mainly to show their adherence to clients’ expectations regarding compliance within North America. SOC 2’s flexible nature enables service organizations to craft bespoke controls that fit particular business workflows and safeguarding objectives efficiently. Customer requirements Understanding the unique needs and sector-specific mandates of customers is essential when selecting between SOC 2 and ISO 27001 compliance standards. Prospective clients may insist on a specific standard and will not substitute one for the other if they have particular demands. It’s critical to recognize what your customers are looking for and confirm that the compliance standard you adopt fulfills their criteria. This approach assists in fostering confidence and guaranteeing adherence to compliance requirements. If you’re still unsure, reach out to us, and we’ll walk through your business’ needs to find the best SOC 2 compliance automation solution. Is there a benefit to achieving both? Securing certifications in ISO 27001 and SOC 2 organizations can significantly reinforce their security stance, satisfying a broad spectrum of customer needs. Together, these credentials confirm the efficient implementation of security controls across the organization’s operations, elevating trust on an international scale and providing a market advantage. Organizations can also choose to implement internal controls related to either framework without necessarily pursuing certification. Moreover, achieving certifications in both SOC 2 and ISO 27001 offers the advantage of streamlined compliance due to the overlap in shared controls like access management, incident response, and risk assessment. By leveraging these commonalities, organizations can minimize repetitive work while maintaining ongoing adherence to both sets of standards. This approach simplifies their compliance procedures by taking advantage of the synergy between SOC 2 and ISO 27001 requirements for continuous compliance. The good news is that, since they have a large amount of overlapping requirements, if you pursue one and then choose to pursue another one later, you can build on your existing foundation. The right tools and automation can help as well. For example, Thoropass’ multi-framework capabilities let you easily map controls across frameworks to eliminate duplicate work. How automation can accelerate compliance Whether you pursue SOC 2, ISO 27001, or both, you’ll want a smooth path to compliance. Platforms designed for compliance automation, like Thoropass, have the capability to accelerate and streamline the process of certification significantly. We achieve this by integrating with current security and management frameworks, facilitating automated preparedness operations, along with monitoring compliance on an ongoing basis. The reduction in both financial burden and labor intensity necessary to achieve compliance through a platform like this can lead to increased client satisfaction while also guaranteeing a smooth audit experience. More FAQs What is the primary difference between SOC 2 and ISO 27001? SOC 2 specifically audits existing security controls, while ISO 27001 mandates the establishment and upkeep of a complete Information Security Management System (ISMS), incorporating all of the 93 Annex A controls. This marks the fundamental distinction between SOC 2 and ISO regarding information security management. Why should I choose SOC 2 over ISO 27001? If your main objective is to show clients, especially those in North America, that you’re compliant, SOC 2 should be preferred over ISO 27001. It provides adaptable and personalized controls that can be shaped to meet your business’s unique needs. Can I achieve both SOC 2 and ISO 27001 certifications simultaneously? It is indeed possible to obtain both SOC 2 and ISO 27001 certifications at the same time, as there is a considerable amount of commonality between their security controls, which can simplify the process of adhering to compliance requirements. How do compliance automation platforms help in the certification process? Compliance automation tools facilitate the certification process by synchronizing with security infrastructures. They streamline preparatory steps and offer continuous oversight for adherence to standards, thereby diminishing both financial expenses and the need for extensive manual input required to attain and preserve compliance status. Consequently, these platforms render the certification journey more streamlined as well as economically favorable. What are the benefits of engaging expert auditors for SOC 2 and ISO 27001 audits? Engaging expert auditors for SOC 2 and ISO 27001 audits ensures thorough and efficient compliance, offering tailored guidance to meet your organization’s specific needs and aligning efforts with regulatory requirements. RECOMMENDED FOR YOU Compliance isn’t just required—it’s good business With our guide to SOC 2 as a business accelerator, find out how you can better leverage compliance in your growth strategy. Cristina Bartolacci See all Posts Get your copy icon-arrow Cristina Bartolacci See all Posts Share this post with your network: Facebook Twitter LinkedIn
