1. SOC 2 vs ISO 27001
Certification
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When it comes to Information Security, companies struggle with the decision between selecting the SOC
2 attestation or ISO 27001 Certification, both the audits provide a competitive advantage in today’s
Information security landscape. However, to understand which audit is required for your organization,
one needs to understand the similarities and differences between the two audits. While both SOC 2 and
ISO 27001 Certification are excellent compliance efforts for organizations to undertake, it is important to
understand which audit can be utilized to gain advantages over the market competition and to achieve
compliancewitharegulatoryrequirement.
Forthisreason,wehavetodaydrawnoutacomparativestudybetweenSOC2examinationandISO27001
certificationforanorganization’sbetterunderstanding.
Explaining SOC 2 Audit Report
A SOC 2 audit evaluates the internal controls, policies, and procedures relating to the AICPA’s Trust
Services Criteria. The audit report typically focuses on a service organization’s internal controls,
pertaining to Security, Availability, Processing Integrity, Confidentiality, and Privacy of a system/process.
The results of a SOC 2 audit report validates an organization’s commitment to delivering high quality,
secure services to clients. SOC 2 Audit Compliance is a powerful market differentiator that can help
companiesgainacompetitiveedgeoverothersintheirindustry.
Explaining ISO 27001 Certification
ISO 27001 is an internationally-accepted Information Security Standard for governing an organization’s
Information Security Management System (ISMS). It is a framework of policies and procedures that
preserves the confidentiality, integrity, and availability of an organization’s information by applyingthe
Risk Management Process. It is a Standard that regulates how organizations effectively run an ISMS
through policies and procedures and associated legal, physical, and technical controls. Compliance with
theStandardgivesconfidencetotheinterestedpartythatrisksareadequatelymanaged.Anorganization
needstointegrateISMSwiththecompany’soperationalprocess,andoverallmanagementstructure.The
aim is to consider Information security across the organization’s design of processes, information
systems, andcontrols.

2. Similarities between ISO 27001 Certification
and SOC 2 Report
Addresses Information Security
In both the cases of SOC 2 and ISO 27001 Certification, the compliance effort focuses on how the
organization identifies and addresses information security issues and adopt an approach to mitigate
information security risk. Both Compliance ensures the establishment of appropriate controls to
maintain the information security risk at an acceptable level.
Implementation of Policy and Procedure
While the Policies and Procedures set to achieve Compliance may differ on different levels, but the
objective is to ensure organizations develop a set Standard or framework to implement Policies and
Procedures for strengthening their Information Security Systems.
International Applicability
Both SOC 2 and ISO 27001 Certificate have international recognition and applicability in the Information
Security Industry.Compliance with both standards can benefit firms with international presences and/or
customer bases. Both the frameworks enable organizations to work internationally with customers
acrosstheglobegivinganassuranceofadoptingthebestpracticeofinformationsecurity.
Management Roles & Responsibility
Compliance with any of the two mentioned framework ensures delineation and understanding of
management responsibilities. This would particularly include setting organizational policies and
proceduresrelating,settinginformationsecurityrolesandresponsibilities,drawingoperationalplanning
andcontrols,leadership,andcommitmenttoorganizations’informationsecurity.
Demonstrates Management Commitment
Both compliance effortsare valuable toan organization in itsunique way,instilling a sense of trustin their
customer and market. Compliance with both frameworks demonstrates management’s commitment,
ensuringthattheorganizationisseriousaboutinformationsecurityandhasaccordinglybeenassessedby
an accredited, certified, and competent third-party assessor. Although both the compliance efforts are
verydifferentfromeachother,theyhelpbuildtrustbetweenserviceorganizationsandvendorpartners.
Assessors for Audit
SOC2examinationsandISO27001certificationsbothrequireanindependentthird-partyassessorwhois
accredited and certified to provide assurance on controls in place to meet the TrustService Criteria (TSC)
Criteria(SOC2)andStandardRequirements(ISO).
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3. Differences between ISO 27001 Certification
& SOC 2 Report
SOC2Reportand ISO27001 Certificatebothcoversimilarpolicy and procedureframeworks withregards
tothesecuritycontrol,designedtoprotectsensitiveinformation.
ISO 27001 has 114 control requirements, but SOC 2 has more than 450+ requirements. In our practical
experience, the overlap of ISO 27001 is around 15% to a max 20% depending on the seriousness with
which the ISO 27001 was actually implemented and practiced.
However, there are quite a few differentiating factors that may suggest one better than the other in
certain cases. So here are some differences between ISO 27001 Certification and SOC 2 Certificate
highlighted below-
1.Focus
ISO 27001 Certificate- The ISO 27001 is an Industry Standard set to help companies protect the
availability, confidentiality, and integrity of the data that they store, manage, or transmit. To achieve
compliance, one must conduct a risk assessment to identify and implement security controls and review
theireffectivenessregularly.Themainfocusistoestablish,implementmaintain,andimproveanISMS.
SOC2Report-TheServiceOrganizationControl2reportfacilitatesreviewofanorganization’s/third-party
vendor’s information security system based on the five Trust Service Criteria: Security, Availability,
Confidentiality, Processing Integrity, and Privacy. The focus is to measure and validate the capabilities of
the service organization’s control system against Security Principles & Criteria. SOC 2 looks at how the IT
delivery,Securityandmanagementareasworksinanorganization.
Note–ItIS importanttonotethatwhileSOC2 cONSIDERS andaddrESSES thePrivacyISSUES BASED onthe5
TSCPRINCIPLES,ISO27001CertificateDOES notfOCUS muchifatallondataprivacyISSUES.
2. Scope & Applicability
ISO 27001 Certificate- The scope and applicability of ISO 27001 Certificate can be defined based on an
organization’s objective and priority. For instance, if an organization wishes to expand its operations
globally, in that case, the company would require an ISO 27001 Certificate (internationally accepted
standard) to build a client base. An organization can decide its scope based on business priorities, plans
and budgetconsiderations.
SOC 2 A†EStation- SOC 2 applies to service organizations storing, processing, and transmitting customer
data or having direct or indirect access to client data. The applicability depends on the service offered,
commitment to clients, and expectations of the stakeholder. While the scope depends on the
organization’s service controls which are based on the 5 Trust Service Principles. Key difference between
scoping of ISO 27001 and SOC 2 is that SOC 2 scoping and applicability is based on what the organisation
providesasaservicetotheclients,theircommitmentsandstakeholderexpectations
(To underStand more on SOC 2 SCope for your organization, you can read through our article on 5 TRUSt
ServicePrincipleforabe†erunderStanding)
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4. 3. Purpose
ISO 27001 Certification– The audit and compliance help organizations establish and achieve
certification stating that the company meets specified requirements and is thus certified as best
practice.
SOC 2 Report- The purpose of conducting a SOC 2 report audit is to facilitate service organization
management in reporting to their customers that they have met established security criteria that
ensure systems are protected against unauthorized access (both physical andlogical).
4. Certification/Attestation
SOC 2 Report- One of the most important differences between SOC 2 and ISO 27001 is that SOC 2
reporting is not a certification. They are examination services performed under the AICPA standards and
considered as an attestation report. The Attestation reports provide an opinion by the assessor/ auditor,
attesting the internal controls of a service organization is in place and meets the criteria related to the
TrustService Principles namely security,availability, processing integrity, confidentiality, and privacy.SOC
2certificationcanonlybeperformedbyalicensedCPA(CertifiedPublicAccountant).
ISO27001Certification-ISO27001isaStandardCertifyinganorganization’sconformitytoitsInformation
Security Management system (ISMS). ISO 27001 audit and certification need to be conducted by a
recognizedISO27001-accreditedcertificationbody.
5. Deliverables
ISO 27001 Certification- The deliverable for an ISO 27001 is a certificate which includes information on
the ISMS scope, in-scope locations, standard certified against, date of certificate issued and date of
expiration,etc.However,areportisissuedattheendofeverystage,surveillanceaudits,andreviews. But
the reports issued are generally for internal use only and are not intended to be a document for an
externaldeliverable,asincaseofSOC2reporting.
SOC 2 Report- For a SOC 2, the final deliverable will be an attestation report which includes an opinion
letter, an assertion letter, a system description containing an extensive narrative on the five key
components of the organization’s system under review ( infrastructure, soGware, people, procedures,
and data) organizational procedures, and finally the applicable trust services criteria, related control
activities,andthetestingperformedbytheauditorandtherelatedtestresults.
6. Certifying Authority
ISO27001Certificate-OnlyarecognizedISO27001-accreditedregistrarcancertifyanorganizationforISO
27001.
SOC 2 Report- Only a licensed CPA firm can conduct the SOC 2 Audit and provide an attestation for the
same. As a word of caution, we have seen SOC 2 reports by companies in India which are attested by CA
(Chartered Accountants)… this is not allowed and may constitute a breach of contract with your client
leadingtoheavypenaltiesandlegalissues.
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5. 7. Organization Applicability
ISO 27001 Certification- The Standard applies to any organization and industry vertical who wish to
strengthen and secure their Information Security Systems.
SOC 2 Attestation- SOC 2 Compliance applies to only service organizations that store, process and
transmits customer data. It applies to nearly every SaaS provider company, as well as any company that
usesthecloudtostoreitscustomers’informationorhaveaccesstocustomerinformation.
8. Market Applicability
ISO 27001 Certificate- ISO 27001 is an international standard accepted globally. For companies that
have a large international client base will probably require ISO 27001 certification for their
organization.
SOC 2 Report- The SOC 2 attestation is a recognized standard in the United States, created and
governed by the AICPA. For companies that have a client base in the US will require SOC 2 attestation
as they are well recognized and accepted there.So, Organizations will require SOC 2 attestation for
earning greater ROI from customers in the US.
9. Time Frame & Validity
ISO 27001 Certification- ISO 27001 depending on scope usually takes 3-4 months to complete, but
dependingontheadditionalprocessanddocumentationrequiredtoinstallanoperatingISMS.ISO27001
Certificationisvalidfor3yearswithbasiccomplianceauditsconductedinthe2ndand3rdyear.
SOC 2 Attestation
It typically takes three to six months to complete an entire process from start to finish for SOC 2 Type 1
attestation.However,itisimportanttonotethatthetimeframedependson thetimetakenbytheservice
organization to implement all of the security controls. ThereaGer,another three to six months to achieve
SOC2 Type2.SOC2 Attestation isonlyvalid for a yearand hencerequires comprehensiveannual auditing
tobe conducted every year.So,as statedearlier achieving SOC 2 attestation involves2 stages namely SOC
2 Type 1 & SOC 2 Type 2. Once SOC 2 Type 1 is achieved, the company has to annually conduct a
Compliance audit for SOC 2 Type 2 every year thereaGer to stayCompliant.(To get more insight to refer to
myarticledifferencebetweenSOC2Type1andType2).
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6. What applies to your organization?
TakingtherightDECISION
While both SOC 2 and ISO 27001 are excellent Compliance efforts to undertake, it is essential to consider
a fewthings when determining the appropriate audit for your organization. Here are a fewquestions you
mustconsiderwhenmakingadecision.
WhichmarketDOES yourorganizationplantotarget?
IfyourcustomerbaseortargetcustomersareinternationalcompaniesbasedintheUS-basedthenopting
for SOC 2 Attestation will be profitable, as SOC 2 is well-recognized and accepted in the US. On the
contrary,ifyou aretargetinganyinternational companyoutsidethe US,one mustoptfor ISO 27001,forit
isapopularStandardwhichisinternationallyacceptedacrosstheglobe.
WhatASSESSMENtsareCUStomerS rEQUESting?
Many audits conducted by service organizations are driven by contractual obligations. So here the
customerlocationorinternational acceptanceofthestandarddoesnotbecomethedrivingfactor. Inthis
case,itbecomesmoreofacontractualobligationforaparticularaudit.
WhatASSESSMENtsareyourcompetitorS undergoing?
Having a competitive edge over others in the industry is critical for your business. So, being additionally
compliant to an internationally accepted standard and marketing a new certification or audit reportof
yourorganizationcouldbethemarketdifferentiator.
Conclusion
As stated earlier while both ISO 27001 & SOC 2 are excellent compliance efforts for organizations to
demonstrate operating effectiveness of their internal controls, and their compliance with regulatory
requirements, considering the key decision factors may help your organization determine the
appropriate assessment for your organization.
Looking at the wider coverage of SOC 2, if your organisation is going ahead with SOC 2, then you will be
meeting the requirements of ISO 27001 by default and you can easily get certified on both SOC 2 and ISO
27001withminimaladditionalefforts.
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