What does SOC 2 Type 2 mean?

SOC 2 Type 2 means that not only the IT control system itself has been assessed, but also its implementation and effectiveness over an extended period. A SOC 2 Type 1 audit therefore primarily assesses whether a control system can work; a SOC 2 Type 2 assesses whether that control system was actually effective during the period.

What is the difference between ISO 27001 and SOC 2?

ISO 27001 focuses on information security across all kinds of organisations. SOC 2 has a somewhat broader scope, the overall IT management, but is specifically intended for IT cloud and service providers. Unlike ISO 27001, a positive SOC 2 audit does not result in a certificate; instead you receive a detailed report that can be shared with customers.

What is the difference between ISAE 3402 and SOC 2?

ISAE stands for International Standard for Assurance Engagements and is an audit standard for reporting on the control of outsourced processes. An ISAE 3402 type 2 report addresses how the service provider controls risks relating to outsourced processes. In this case the assessment framework is formed by outsourcing and the financial processes. In a SOC 2 report the assessment framework is not formed by outsourcing but by informatiebeveiliging. SOC 2 reports therefore do not focus on financial processes, but on Trust Services Criteria such as security, availability, confidentiality, processing integrity, and privacy within a service organisation.

Must every company comply with SOC 2?

No, SOC 2 compliance is not mandatory, but it is very useful for IT cloud and service providers. They can easily give prospective customers of their services insight into the quality of their service delivery, without every customer having to commission their own audit.

What is SOC 2? Understanding Information Security Audits

SOC 2 (Service Organisation Control 2) is a framework for auditing information security and data management within service organisations. Developed by the American Institute of Certified Public Accountants (AICPA), the audit focuses strictly on the management and protection of customer data.

Unlike general security checklists, SOC 2 evaluates an organisation against five specific "Trust Services Criteria":

Security: The system is protected against unauthorised access (physical and logical).
Availability: The system is available for operation and use as committed or agreed.
Processing Integrity: System processing is complete, valid, accurate, timely, and authorised.
Confidentiality: Information designated as confidential is protected as agreed.
Privacy: Personal information is collected, used, retained, disclosed, and disposed of in conformity with the organisation’s privacy notice.

The Rationale: Why SOC 2 Exists

The need for SOC 2 arises from the fact that organisations increasingly outsource the collection, storage, and processing of personal data to cloud service providers. This ranges from standard platforms like Microsoft 365, where files are stored in the cloud, to specialised healthcare applications that process sensitive patient data online.

As the contracting organisation, you remain the Data Controller. You are responsible for what happens to that data. The UK GDPR and Data Protection Act 2018 provide clear guidelines:

Processing: You must define which personal data is processed and for what purpose.
Consent: You must strictly follow rules on when and how to ask individuals for consent.
Rights: Individuals have the right to access their stored data and have it deleted (the "Right to be Forgotten").
Protection: You must take appropriate technical and organisational measures to protect personal data against unlawful use.

When you enter a contract with a cloud provider, you need certainty that their data management is robust from end to end. A SOC 2 attestation provides that assurance. It confirms that a certified auditor has assessed the provider’s internal controls for managing the IT environment, not just technically, but also in terms of organisational processes.

compliance worden SOC 2

The Consequence of Vendor Failure

Because you remain responsible for your data management, the impact can be significant if your service providers make mistakes. The risks are financial, legal, and reputational:

Regulatory Fines: The Information Commissioner's Office (ICO) and other European regulators can impose substantial fines if guidelines are not followed. Under GDPR, these fines can reach £17.5 million (or €20 million) or 4% of an organisation’s worldwide annual turnover, whichever is higher.
Liability Claims: Customers can file claims in the event of data breaches, especially if it transpires that the organisation did not have its supply chain data management in order.
Reputational Damage: Trust is hard won and easily lost. A breach involving a third-party provider can permanently damage your standing in the market.

While an organisation can attempt to recover damages from a negligent provider, success is never guaranteed. A SOC 2 attestation does not mean that nothing can ever go wrong; however, it demonstrates that you have done everything reasonably possible (due diligence) to prevent problems.

Achieving SOC 2 Compliance

SOC 2 compliance means that a service organisation has undergone an audit by an independent CPA firm certified to perform these examinations. The results are recorded in a SOC 2 Assurance Statement.

This audit assesses information security and, depending on the agreed scope, the availability, integrity, confidentiality, and privacy measures. This is done in accordance with the strict guidelines issued by the Assurance Services Executive Committee (ASEC) of the AICPA. Service providers share this report with existing and prospective customers to prove the quality of their services.

There are two distinct types of SOC 2 certification:

Feature	SOC 2 Type I	SOC 2 Type II
Focus	Design of controls at a specific point in time.	Operational effectiveness of controls over a period.
Evidence	Documentation, interviews, and observations.	Testing of control results over 6 to 12 months.
Scope	Are the correct systems in place?	Are the systems actually working as intended?
Audit Frequency	Usually a one-off for a specific date.	Conducted annually to ensure continuous compliance.

1. SOC 2 Type I Examination This audit assesses the design of the IT service system and the controls that have been defined at a specific point in time. The auditor verifies that the controls are suitably designed to meet the Trust Services Criteria. Evidence is gathered via:

Documentation review.
Staff interviews.
Observations and sampling.

2. SOC 2 Type II Examination This is a more rigorous assessment. It evaluates not only the design (as in Type I) but also the operational effectiveness of those controls over a period of time (typically 6 to 12 months). A Type II report proves that the controls were not just "in place" but were actually functioning effectively in practice. To remain compliant, a new audit must be conducted annually.

The Benefits of SOC 2

The primary advantage of SOC 2 is that a robust, standardised audit gives all parties insight into the quality of IT services without the need for redundant work.

For the Customer: You do not need to commission an extensive, bespoke audit of your vendor. You can simply review their SOC 2 report to satisfy your vendor risk management requirements.
For the Provider: It provides ample opportunity to learn and further improve the control system. It demonstrates to the market that the organisation is fully "in control" of its processes.

ISO 27001 vs SOC 2

When we compare ISO 27001 with SOC 2, we see that a SOC 2 report is a clear complement to an ISO 27001 certificate rather than a replacement.

ISO 27001 establishes the requirements for an Information Security Management System (ISMS).
SOC 2 provides a detailed assurance report on the effectiveness of those controls.

SOC 2 often considers more than just security (such as privacy and processing integrity) and the assurance report provides significant insight into the organisation, resources, and processes. It is heavily used to demonstrate business continuity and operational maturity.

Tools4ever SOC 2 Audit Attestation

Tools4ever is a modern IAM cloud service provider. Our HelloID solution is an Identity as a Service (IDaaS) platform that enables organisations to consume IAM functionality entirely from the cloud. We manage and develop the platform so customers can focus fully on using the functionality.

To demonstrate the quality of our cloud services, we have had the HelloID platform assessed with a SOC 2 Type II audit.

This audit was conducted by auditors from Brand Compliance. The resulting assurance report covers the full scope of our cloud services, including:

Supplier management.
Software development processes (SDLC).
Internal corporate governance.
Risk management processes.

This attestation confirms that our internal controls are operating effectively, providing you with the assurance needed to trust your identity data to the cloud.