The 2025 Guide to SOC Reports

If customers ask you for a “SOC report,” they’re really asking for independent assurance—performed by a CPA or American Institute of Certified Public Accountants (AICPA)-accredited firm—about your internal controls for financial reporting, data privacy, and security practices. The AICPA defines three main flavors: SOC 1, SOC 2, and SOC 3. They share the same attestation backbone, but they serve different audiences and test different control criteria.

Below is an in-depth overview of each report, explaining how they differ and the specific control areas to address before engaging a SOC compliance consultant.

SOC 1: Controls Relevant to Financial Reporting

Best for: Service organizations whose services could impact a customer’s financial statements, such as payroll processors, fintech platforms, benefits administrators, or claims processors.

What the report covers: Controls at the service organization that are likely to be relevant to user entities’ internal control over financial reporting (ICFR). The purpose is typically to help your customers’ financial auditors rely on your controls when auditing the customers’ financials. There are two types of SOC 1 reports. Type I tests the design of controls at a point in time, while Type II tests the design and operating effectiveness of controls over a period of time (typically 6–12 months).

Controls to prioritize for SOC 1:

• Data Completeness and Accuracy: Input, processing, and output controls; reconciliations; exception handling.
• Change Management: Formal change approval, testing, segregation of duties, emergency changes.
• Logical Access: Provisioning, de‑provisioning, authentication, least privilege, periodic access reviews.
• Interface and Job Processing: Scheduled jobs, interfaces between systems, error monitoring, retry/rollback.
  Data Transmission and Integrity: Encryption in transit, file totals/record counts, integrity checks.
• Backup and Recovery (as It Affects Financial Processing): Backups, restore tests, continuity steps for critical financial jobs.

These objectives and control themes align to how user auditors evaluate reliance on your system for their ICFR. The AICPA positions SOC 1 squarely on ICFR; however, your specific “control objectives” are tailored to your service.

SOC 2: Controls Relevant to the Trust Services Criteria (TSC)

Best for: Cloud/SaaS companies, data processors, and any service where customers need detailed assurance about security and data protection measures.

What the report covers: Your controls are evaluated against the AICPA’s TSC. Organizations must always include Security and may add Availability, Processing Integrity, Confidentiality, and/or Privacy depending on their commitments to customers. SOC 2 TSCs are tested using the Common Criteria (CC-Series), which define specific areas of controls that apply broadly across all the TSCs.

Similar to SOC 1, SOC 2 includes a Type 1 report to test control design at a specific point in time and a Type II report to test control design and operating effectiveness over a period of time (typically 6–12 months).

Areas to prioritize for SOC 2:

• CC9: Risk Mitigation: Identifies and addresses business continuity, disaster recovery, and vendor risks; implements mitigation strategies for identified risks (e.g., backup plans, third-party assessments); reviews risk response plans and validates effectiveness regularly.
• CC1: Control Environment: Establishes the tone at the top regarding integrity and ethics; ensures that roles, responsibilities, and authority are clearly defined; promotes accountability and enforces standards of conduct.
• CC2: Communication and Information: Ensures relevant internal and external information is identified and communicated, promotes effective communication of roles and responsibilities related to internal control, includes mechanisms to obtain and share security-related information.
• CC3: Risk Assessment: Identifies and analyzes risks to achieving business and compliance objectives; assesses the potential for fraud and considers how risks could arise from internal and external sources; considers changes in the environment, business model, and operations.
• CC4: Monitoring of Controls: Involves ongoing and/or periodic evaluations of controls, ensures that deficiencies in internal controls are identified and communicated in a timely manner, incorporates feedback from incident detection and assessments.
• CC5: Control Activities: Implements policies and procedures to mitigate risks and achieve control objectives, includes preventive and detective controls related to system changes and data processing, ensures segregation of duties and approval workflows are in place.
• CC6: Logical and Physical Access Controls: Restricts access to systems and data based on business need, uses authentication and authorization mechanisms (e.g., MFA, RBAC), includes physical safeguards such as facility access restrictions.
• CC7: System Operations: Monitors systems for anomalies, vulnerabilities, and security events; ensures timely response and recovery from operational failures; maintains system performance and reliability through logging, alerting, and patching.
• CC8: Change Management: Controls the process for system changes (e.g., software updates, configuration changes); includes approvals, testing, and documentation of changes; prevents unauthorized or untested changes from impacting the production environment.

SOC 3: A Public, Marketing-Ready Summary of SOC 2

Best for: Organizations that want a general‑use report they can publish on their website to demonstrate they passed a SOC 2 examination—without disclosing some of the sensitive details in a restricted‑use SOC 2 report.

What the report covers: The same Trust Services Criteria as SOC 2, but at a high level. It omits the detailed system description, control lists, and test results found in SOC 2. Many companies publish the SOC 3 report and provide the SOC 2 report under NDA. Note that SOC 3 does not offer a Type I report. Instead, it summarizes the results of a SOC 2 Type II report in public-facing format.

Choosing the Right Report (and Scope)

• Pick SOC 1 when your service could change what ends up in a customer’s ledger or financials (e.g., calculates billings, posts transactions).
• Pick SOC 2 when customers primarily need security and data‑protection assurance(typical for SaaS and managed services).
• Produce a SOC 3 alongside SOC 2 when you want a public‑facing attestation you can post on your website.

What a SOC Compliance Consultant Can Do for You

So, now that you understand the different types of SOC reports, lets talk about why you should work with a SOC compliance consultant. Here are just a few of the ways that a consultant can help with SOC compliance:

• Readiness Assessment and Gap Analysis: Map your current controls to ICFR objectives (SOC 1) or TSC (SOC 2), identify gaps, and prioritize remediation by risk and auditability.
• Program Design and Evidence Coaching: Draft or upgrade policies and procedures, tighten workflows (access reviews, change tickets, incident response), and establish evidence trails that withstand testing.
• Audit Orchestration: Coordinate with your chosen CPA firm, prepare the system description, shepherd sampling requests, and coach control owners through interviews and walkthroughs.
• Continuous Compliance: Implement monitoring (e.g., quarterly access reviews, vulnerability SLAs) so your Type 2 period operates cleanly—with fewer “exceptions” in the final report.

IS Partners has more than 20 years of experience with SOC 1 and SOC 2 audits. Our certified auditors deliver hassle-free audits, streamlining the process and enhancing security and compliance—all without disrupting your operations. Check out our full suite of SOC compliance services to learn more about how we can help reduce risk exposure and strengthen data security, customer trust, and regulatory compliance.