The American Institute of Certified Public Accountants (AICPA) defines three different types of SOC reports consisting of a SOC 1, SOC 2, and SOC 3 report.
A SOC 1 report is designed to address the internal controls over financial reporting of your organization.
A SOC 2 report addresses a service organization’s information security controls that are relevant to their operations and compliance. As more and more companies use the cloud to store data, SOC 2 compliance is becoming a necessity for any company that stores, processes, or transmits customer data.
A SOC 3 report is a variation of the SOC 2 report and contains the same information as SOC 2, but it’s presented for a general audience rather than an informed one.
There has always been some level of confusion between SOC 2 and SOC 3 reports and their underlying differences. Which is right for my business? What do they both entail? Let’s take a look at the key differences between a SOC 2 and SOC 3 report.
What is a SOC 3 report?
The number after ‘SOC’ does not give a sense of the level of security or rigor involved. The SOC 1 and SOC 2 standards include a report that describes the system and services provided to customers. These reports often contain sensitive information about your business operations and aren’t made publicly available.
It becomes very burdensome for large companies to require NDAs from every user who wants to see their SOC 2 report and that’s why SOC 3 was introduced. It is simply a way for general users to read the SOC 2 Type 2 auditor’s opinion without the additional details in the SOC 2 report. Therefore, they can obtain a confirmation of compliance without having to receive the complete report.
The SOC 3 is a public report of internal controls over security, privacy, availability, processing integrity, and confidentiality.
What is the difference between SOC 2 and SOC 3?
While the SOC 3 or SOC 2 examinations have many similarities, the most fundamental distinction between SOC 3 and SOC 2 is the reporting. More specifically, the intended audience for each report, the level of detail, and the intended distribution for each report are very different.
|Differentiating factors||SOC 2||SOC 3|
|Intended Audience||Restricted-use reports, meaning they’re only intended for a specific audience. Customers and prospects, service organization management, or other specifically named parties are examples of who would read a SOC 2 report.||SOC 3 reports are for general use.|
|Level of Detail||The SOC 2 report contains an auditor’s opinion, management’s assertion, as well as a detailed review of the security controls.||Summary of a SOC 2 report results, written in a way that’s intended for people with a general interest in the organization without getting into the specific details.|
|Intended distribution||A SOC 2 report is suited for an organization to provide their customers that seek details, as to how their organization is performing in maintaining security controls to protect their data.||SOC 3 reports can be distributed publicly, and the audited companies can use them for marketing purposes.|
The Benefits of SOC 3 reports
A SOC 3 report has several benefits:
- It facilitates easy sharing. You can easily share your SOC 3 report with your customers since it excludes all of the sensitive or confidential information detailed in a SOC 2 report. The data can be made available to broader groups of customers and other parties without the need for a NDA and without the friction of needing to handle each request manually.
- Often, SOC 3 opinions are posted on an organization’s website so that customers or prospects can easily verify the organization for their own compliance purposes or just to confirm the assertion of compliance with the SOC 2 Trust Services Criteria.
- The ability to add another information security compliance logo is a benefit. Security and compliance logos are often treated like customer logos. The more you have and the higher quality they are perceived to be, the better it reflects on your business.
SOC 2 vs SOC 3 reports: Which report should I choose?
In terms of SOC 3, it is more of a relatively inexpensive add-on. The report may be more effective if you share it with your customers in a more personal way.
It is highly advised to undergo SOC 2 compliance and once receiving your official SOC 2 report, you can choose to also attain your SOC 3 report.
In summary, the main differences between SOC 2 reports and SOC 3 reports are their level of detail and how they are shared with customers. SOC 2 reports are highly detailed, restricted-use reports, whereas SOC 3 reports are summarized reports. SOC 3 compliance is a report consisting of an overview of an organization’s SoC 2 compliance – This includes controls and processes (regarding the security, availability, processing integrity, confidentiality, and privacy of its systems). The SOC 3 report demonstrates an organization’s commitment to maintaining a high standard of security and data protection by referring to an organization’s successful adherence to the requirements of SOC 2 compliance.
Both reports instill confidence in the organization’s ability to safeguard customer data, enhance transparency, and mitigate security risks associated with information security breaches. Ultimately, SOC 3 reports are valuable tools in establishing trust and credibility in an increasingly interconnected and data-driven world. As mentioned previously, an additional benefit of the SOC 3 reports is that they provide this data security assurance without divulging too much information. This is important because it allows organizations to maintain a level of confidentiality while still demonstrating their SOC 2 compliance.
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