SOC 2 vs. ISO 27001: Understanding the Difference

Though SOC 2 and ISO 27001 certifications differ, they’re more similar than one might think. For example, both are significant for data safety—a concern increasingly becoming a top priority for B2B organizations.

As a result of the fear of cybersecurity threats, businesses are taking heed by demanding vendors prove themselves trustworthy. That’s where Service Organization Control 2 (SOC 2) or ISO reports come into play.

In this guide, we explain all things SOC 2 and ISO certification. Additionally, we discuss what certification businesses should focus on and how they can best approach the certification journey.

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What is SOC 2?

A SOC 2 certification determines how well an organization conforms to a Trust Service Criteria, or TSC, established by the AICPA (American Institute of Certified Public Accountants). Third-party auditors give SOC 2 certifications based on reports regarding cybersecurity, confidentiality, risk management, and privacy.

SOC 2 attests to the controls you have from a security, privacy, and compliance perspective, especially if you’re an organization that sells applications or services.

Getting SOC 2 certified through an external audit gives organizations with whom you make business peace of mind regarding security. Organizations want assurance that you meet regulatory requirements as a service provider.

There are two types of SOC 2 audits.

1. Audit type 1 - Carried out over one day
2. Audit type 2 - Carried out over time, with a minimum of six months

The results of a SOC 2 certification determine whether an organization complies with TSC rules according to the selected trust service categories.

How businesses can navigate SOC 2

Clear objectives are vital for a smooth SOC 2 audit. Prioritizing security during the initial planning stages for certification can minimize the need for extensive gap analyses.

Understanding the geographical reach of your business and client base is crucial in deciding the initial certification to pursue. For companies primarily engaging with North American customers, beginning with the modular SOC 2 certification - which allows the addition of confidentiality or other extensions - is recommended. Many companies also utilize some type of compliance management software to to augment their auditing and risk management processes.

What is ISO 27001?

ISO 27001 compliance certification is the international standard for data security measures. The International Organization for Standardization sets ISO 27001 compliance tests for and assesses information security. An accredited body issues the certification.

What’s so important about an ISO 27001 certification? It’s one of the best ways for organizations to handle customer data safely. ISO helps protect three main areas: accessibility, confidentiality, and processing integrity.

Managing ISO 27001 certification ensures the company has a security program known as ISMS or Information Security Management System. Once in place, its set of controls helps keep your sensitive data from being compromised.

ISO is increasingly relevant for businesses in the European Union that need to comply with HIPAA (Health Insurance Portability and Accountability Act) and GDPR (General Data Protection Regulation) measures because both privacy laws specifically apply to the area.

How businesses can navigate ISO 27001

Pursuing an ISO certification varies slightly from other processes. Experts recommend seeking ISO certification when expanding to markets such as the EU. In contrast, the opposite applies if operating out of North America, indicating a natural progression in the certification process.

Achieving an ISO certification requires setting realistic goals and having a comprehensive understanding of the process's scope and resources needed for completion. Essentially, it calls for a meticulously prepared plan.

Entering the certification process with an unclear purpose and ill-prepared can lead to unnecessary work and revisions.

Preparation includes adopting security and compliance best practices consistently. Doing so facilitates the provision of requisite evidence and information, making the passage of an ISO certification smoother without requiring additional extensive efforts.

Is SOC 2 equivalent to ISO 27001?

ISO and SOC 2 significantly overlap by approximately 96% in their controls, essentially serving the same function. The primary distinction between ISO and SOC 2 lies in their regional focus, with SOC 2 being more North American-centric. The choice between the two depends on the region where the business operates and how teams implement internal controls universally.

SOC 2 vs. ISO 27001: Similarities and differences

Beyond geography, here are a few specific similarities and critical differences between both certifications:

Similarities between SOC 2 and ISO Security

Both SOC 2 and ISO Security share a common goal of ensuring organizations securely handle sensitive data. This is achieved through a series of risk assessments. Furthermore, both certifications validate that organizations meet strict security standards.

When paired with automation and workflows informed by IT needs, both certification processes become significantly easier. Being certified in both standards assures potential investors that the organization takes data security seriously and is less likely to fall prey to a data breach.

Neither SOC 2 nor ISO Security standards are mandatory to complete, however, they are generally considered as best practices in the industry. The operational costs associated with maintaining compliance with either standard are similar.

Most significant differences between SOC 2 and ISO

On the other hand, there are some noteworthy differences between the two standards. The geography in which they apply is one such distinction. SOC 2 is more applicable to North American businesses, while ISO 27001 certification is more relevant to organizations operating in the European Union. However, both certifications are beneficial for companies to possess regardless of their location.

The scope of the standards also varies. SOC 2 focuses more narrowly on demonstrating that an organization has implemented essential security protocols. Conversely, ISO 27001 provides a broader framework for how organizations should manage data security and demonstrates they have an entire Information Security Management System (ISMS) implemented.

Another difference lies in standardization. ISO 27001 is a formal international standard, whereas SOC 2 standards can be more flexible, adjusting to industry and geographical standards.

The certification process for each also differs. ISO 27001 certification must be completed by a recognized and accredited body, whereas any licensed CPA can complete the SOC 2 certification.

Finally, the time and cost required for these certifications are also different. It takes most organizations about 50 percent longer to complete their ISO 27001 certification, which also costs about 50 percent more than a SOC 2 audit.

The importance of automation

As businesses operate rapidly, having an automated system to account for controls and generate evidence is vital. Automation alone can expedite the certification process and promote progress toward set goals.

There is a profound difference between pursuing certification with and without automation. Automated tasks such as control attestation or evidence collection significantly reduce the time involved, often to a third of manual methods.

Automation eliminates much laborious work, ensuring accuracy and propelling the process forward. Therefore, businesses are encouraged to automate the certification process as much as possible.

Manage compliance efforts with Vendr

SOC 2 and ISO 27001 are security and compliance tests that ensure you’re handling sensitive data correctly. Beginning with compliance in mind is a meaningful way to ease the certification process.

Yet pursuing compliance certification can be smooth with an automated workflow system. As a systematic process, it’s necessary to have the controls in place to help unlock the organization for successfully running tests, sharing attestation reports, and streamlining communication between stakeholders.