Organizations often hear about SOC 1, SOC 2, and ISO 27001, but understanding the differences can be challenging. While these frameworks are frequently requested together in vendor assessments, they serve different objectives, address distinct risks, and target unique audiences. By understanding SOC 1 vs SOC 2 vs ISO 27001, organizations can confidently select the right assurance framework for their services, ensuring they meet customer expectations, strengthen trust, and align with compliance requirements. Choosing the correct framework also helps reduce unnecessary audits and simplifies vendor due diligence processes.
Purpose in Brief
SOC 1
SOC 1 reports evaluate a service organization’s internal controls over financial reporting (ICFR). These reports are designed to give auditors and financial stakeholders confidence that a provider’s systems, processes, and supporting technologies do not introduce errors or misstatements into customers’ financial statements. SOC 1 examinations are performed by licensed CPAs and follow the AICPA’s attestation standards, making them the primary form of assurance relied upon by external auditors when a service provider impacts a client’s financial reporting workflow.
For organizations that handle transactions, reconciliations, payroll processing, or financial data, SOC 1 provides a trusted and often required mechanism for demonstrating control reliability and accuracy.
Key Points
- Focused exclusively on financial reporting: SOC 1 evaluates only controls that impact customers’ financial statements or ICFR obligations. It is not a cybersecurity assessment and should not be used to demonstrate general security posture.
- Primary audience: Financial auditors, CFOs, controllers, and compliance teams rely on SOC 1 results to reduce their own testing burden and support audit opinions.
- Common industries: Payroll processors, claims administrators, fintech platforms, loan servicers, benefits administrators, and financial service providers often require SOC 1 reports.
Ultimately, SOC 1 is the right choice when your services affect your customers’ financial reporting. Demonstrating that your controls are properly designed, and, in a Type II report, operating effectively over time, provides auditors and stakeholders with the assurance they need. For organizations in financially sensitive industries, SOC 1 is more than a compliance requirement; it’s a foundation for trust, transparency, and long-term client relationships
SOC 2
SOC 2 reports evaluate a service organization’s security and risk-related controls based on the AICPA Trust Services Criteria (TSC). Unlike SOC 1, which focuses solely on financial reporting—SOC 2 assesses whether systems are secure, available, confidential, and reliable according to industry-recognized standards.
A SOC 2 attestation provides independent, CPA-validated assurance that an organization implements effective controls to safeguard data and maintain trustworthy operations. Because it addresses modern cybersecurity expectations, SOC 2 has become a standard requirement for SaaS platforms, managed service providers (MSPs), cloud environments, and technology vendors handling sensitive customer information. For CISOs, enterprise procurement teams, and vendor risk managers, a SOC 2 report is often the deciding factor in vendor onboarding and risk acceptance.
Key Points
- Trust Services Criteria (TSC): Security (mandatory), availability, confidentiality, processing integrity, and privacy. SOC 2 allows organizations to tailor the examination to the specific risks of their services. Security covers foundational protections such as access control, monitoring, and incident response, while optional categories address broader operational, data handling, and reliability expectations.
- Primary audience: IT and security leaders, SaaS buyers, procurement teams, and vendor risk managers rely on SOC 2 results to validate a provider’s control environment. SOC 2 is more relevant to technical stakeholders than SOC 1.
- Applicable industries: SaaS providers, MSPs, cloud services, managed IT/security service organizations, and data platforms. For technology vendors, a SOC 2 report is often a prerequisite for enterprise contracts and can reduce the need for follow-up questionnaires, customer audits, and bespoke security reviews.
SOC 2 is the leading framework for demonstrating cybersecurity assurance, operational reliability, and responsible data handling. By validating controls against the Trust Services Criteria, a SOC 2 report helps organizations establish trust with customers, accelerate procurement cycles, and strengthen risk posture. For technology-driven companies, obtaining a SOC 2 attestation signals accountability, security maturity, and long-term commitment to protecting customer data.
ISO 27001
ISO 27001 is an internationally recognized standard that certifies an organization’s implementation of a formal, risk-driven Information Security Management System (ISMS). Unlike SOC reports, which provide point-in-time or period-of-time assurance through CPA attestation, ISO 27001 requires organizations to maintain an ongoing governance framework that embeds security into day-to-day operations. Certification is issued by accredited ISO bodies and validates that an organization has established clear leadership accountability, documented processes, risk assessment practices, and continuous improvement mechanisms aligned with ISO requirements.
Because ISO 27001 is globally recognized and aligned with international procurement expectations, it is a critical certification for organizations operating across borders or serving regulated industries.
Key Points
- International recognition: ISO 27001 is accepted across global markets, offering a consistent, standardized assurance model regardless of region, industry, or regulatory environment. This global acceptance makes it a baseline requirement in many multinational vendor onboarding processes.
- Preferred by global enterprises: ISO 27001 is often mandatory, or strongly preferred, for organizations working with international clients, public-sector agencies, financial institutions, and regulated supply chains. Certification demonstrates a sustained security governance program, which many buyers consider more comprehensive than annual attestations alone.
- Governance and risk focus: ISO 27001 emphasizes leadership involvement, formal policies and procedures, defined roles, and a structured risk assessment process. The standard promotes continuous improvement through internal audits, management reviews, and corrective actions, ensuring the ISMS evolves with technology, threats, and business requirements.
ISO 27001 is the ideal choice for organizations seeking globally recognized certification and a governance-driven security approach. By implementing a formal ISMS and demonstrating compliance through an accredited certification audit, organizations signal maturity, accountability, and long-term commitment to protecting information assets. Whether supporting global clients, entering new markets, or strengthening internal governance, ISO 27001 provides a robust framework that enhances credibility, reduces risk, and establishes a resilient foundation for sustainable security excellence.
Scope
SOC 1
The scope of a SOC 1 examination is limited to controls that directly impact Internal Control over Financial Reporting (ICFR). This includes systems, processes, and IT components that could influence how financial transactions are initiated, authorized, processed, or reported. Only elements with a potential effect on a customer’s financial statements are evaluated. The SOC 1 scope is intentionally narrow and focused, designed to give auditors confidence that the service organization’s operations will not introduce errors or misstatements into client financial reporting. Controls unrelated to ICFR, such as general cybersecurity or privacy practices, are excluded unless they directly support financial reporting accuracy.
SOC 2
The scope of a SOC 2 examination is defined by the Trust Services Criteria (TSC) selected for the engagement. Security is mandatory, while availability, confidentiality, processing integrity, and privacy are optional based on service relevance. SOC 2 covers controls related to cybersecurity, data protection, system reliability, access management, monitoring, logging, change management, and incident response. A key aspect of SOC 2 scoping is defining system boundaries and service commitments. The examination applies only to the systems and processes that support the services described in the system description. This ensures that the SOC 2 report accurately reflects how the organization protects customer data and maintains reliable operations for the services provided.
ISO 27001
ISO 27001 scoping defines the boundaries of the organization’s Information Security Management System (ISMS). The ISMS may include people, processes, technology, governance structures, documentation, physical facilities, and supporting systems, depending on the organization’s choice. Certification requires conformity with ISO 27001’s mandatory clauses and alignment with the Annex A control set, based on risks identified within the ISMS scope. ISO 27001 certification applies only to the defined ISMS scope, not the entire organization by default. A company may certify a specific business unit, set of systems, or geographic region, and only those in-scope components are covered by the certification and appear on the ISO certificate.
Audience
SOC 1
The primary audience for SOC 1 reports includes user auditors, controllers, and finance teams who rely on accurate financial reporting from service providers. These stakeholders use SOC 1 results to determine whether a vendor’s systems and processes could introduce errors into customers’ financial statements. For organizations such as payroll processors, claims administrators, and financial platforms, SOC 1 provides essential assurance to clients with financial reporting dependencies. Because SOC 1 directly supports external audits and regulatory compliance, it is routinely requested by organizations operating in financially sensitive industries.
SOC 2
SOC 2 reports are primarily used by vendor risk teams, CISOs, CIOs, IT security leaders, and enterprise procurement groups assessing a vendor’s cybersecurity posture. Unlike SOC 1, SOC 2 focuses on service reliability and data protection, making it a core requirement in modern vendor risk management programs. SaaS buyers and technology evaluators rely on SOC 2 reports to validate whether a provider’s controls meet expectations for security, availability, confidentiality, and other Trust Services Criteria. For technology companies, a SOC 2 report often acts as a gatekeeper to enterprise contracts and high-security environments.
ISO 27001
ISO 27001 is recognized globally, making it particularly valuable for organizations serving international clients or operating across multiple regions. Its audience includes global buyers, multinational procurement teams, and organizations requiring internationally recognized certification as part of their security due diligence. Because ISO 27001 demonstrates a formal, governance-driven approach to risk management, it is frequently required in international tenders, public-sector procurements, and regulated industries where certification carries significant weight.
Comparison Table: Audience for SOC 1 vs SOC 2 vs ISO 27001
| Framework | Primary Audience | Why They Care |
| SOC 1 | User auditors, financial controllers, and customers with financial reporting dependencies | Ensures vendor processes do not introduce errors into financial statements; supports ICFR audits. |
| SOC 2 | Vendor risk teams, IT and security leaders, enterprise procurement reviewers | Validates cybersecurity and system reliability controls; essential for SaaS and technology vendor evaluations. |
| ISO 27001 | Global customers, international procurement teams, organizations needing recognized certification | Demonstrates a formally governed, internationally certified ISMS aligned with global security expectations. |
Control Focus
Each framework emphasizes different types of controls based on its purpose:
- SOC 1 focuses on financial reporting accuracy.
- SOC 2 emphasizes security and reliability controls aligned with the Trust Services Criteria (TSC).
- ISO 27001 centers on governance, documentation, and the operation of a formal Information Security Management System (ISMS).
Below is a breakdown of the core control themes for each framework:
SOC 1
- Transaction accuracy and financial data processing integrity
- Authorization, reconciliation, and approval workflows
- IT and business processes that directly support Internal Control over Financial Reporting (ICFR)
SOC 2
- Cybersecurity and system reliability controls aligned to the Trust Services Criteria
- Access management, authentication, and least-privilege practices
- Monitoring, logging, and alerting mechanisms
- Controls supporting availability and confidentiality of customer data
- Risk assessment processes and incident response procedures
ISO 27001
- Governance, leadership involvement, and clearly defined roles within the ISMS
- Formal risk assessment and risk treatment methodology
- Documented policies, procedures, and operational requirements
Ongoing ISMS improvement through internal audits, corrective actions, and management reviews
Assurance Output
SOC 1
A SOC 1 engagement produces a CPA-attested report issued under the AICPA’s attestation standards, providing formal assurance over controls relevant to Internal Control over Financial Reporting (ICFR).
- Type I Report: Evaluates whether controls are suitably designed at a specific point in time.
- Type II Report: Assesses both the suitability of design and the operating effectiveness of controls over a defined period.
SOC 1 reports are relied upon by user auditors and financial stakeholders who need confidence that a service provider’s systems will not introduce errors into customers’ financial statements.
SOC 2
A SOC 2 engagement results in a CPA-attested report addressing the organization’s selected Trust Services Criteria (TSC), security is mandatory, while other categories (availability, confidentiality, processing integrity, privacy) are included based on relevance.
The report includes:
- A detailed system description outlining system boundaries, service commitments, and control responsibilities
- Auditor criteria mapping and test results
- For Type II reports, documentation of the operating effectiveness of controls over the audit period
SOC 2 reports provide technology buyers, vendor risk teams, and security leaders with trusted insight into the organization’s security posture and operational reliability.
ISO 27001
ISO 27001 certification is issued by an accredited certification body and validates that an organization’s defined Information Security Management System (ISMS) conforms to ISO 27001 requirements.
- Certification is valid for three years, with annual surveillance audits to confirm continued alignment with ISMS policies, risk-management practices, and operational controls.
- A key component is the Statement of Applicability (SOA), which outlines:
- Applicable Annex A controls
- Rationale for inclusion/exclusion
- Implementation details within the ISMS scope
ISO 27001 certification provides long-term assurance of an organization’s governance-driven approach to security and demonstrates a commitment to continuous improvement and risk management.
Conclusion
Each assurance framework serves a distinct organizational purpose:
- SOC 1 supports financial reporting integrity, providing assurance to auditors and controllers.
- SOC 2 demonstrates cybersecurity and system reliability practices aligned with the Trust Services Criteria.
- ISO 27001 focuses on governance, risk management, and the long-term maturity of an Information Security Management System (ISMS).
Because these frameworks address different challenges, many organizations, particularly SaaS providers, MSPs, fintech companies, and global service organizations, benefit from pursuing more than one framework.
Understanding the differences between SOC 1 vs SOC 2 vs ISO 27001 empowers organizations to approach assurance requirements with confidence and clarity, rather than confusion. Each framework provides a unique type of trust:
- Financial accuracy (SOC 1)
- Cybersecurity assurance (SOC 2)
- Governance maturity (ISO 27001)
By selecting the right framework, or combination of frameworks for your organization, you can meet customer expectations, reduce operational risk, and strengthen credibility in an increasingly competitive market.
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