SOC 1 and SOC 2 are two different types of compliance reports particularly important for small and medium-sized businesses (SMBs), but they serve different purposes.
SOC 1 – is for SMBs whose services might influence a client’s financial statements; it’s about proving the company’s financial operations are trustworthy and accurate. [3][4][1]
SOC 2 – is for SMBs that manage sensitive information (not just financial), assuring clients that data security, confidentiality, and privacy measures are effective. [2][4][9]
Having the right report helps attract and retain clients by showing dedication to compliance and industry best practices. [4][2]
In summary, choose SOC 1 for financial impact, and SOC 2 for data security—as most tech-enabled and cloud businesses require SOC 2 to prove data protection to customers.[9][1][2][4]
[1] (https://www.isms.online/soc-2/framework-comparisons/soc-1-vs-soc-2-whats-the-difference/)
[2] (https://sprinto.com/blog/soc-1-vs-soc-2/)
[3] (https://www.vanta.com/collection/soc-2/soc-1-vs-soc-2-which-one-do-you-need)
[4] (https://www.aprio.com/soc-1-vs-soc-2-understanding-the-key-differences-for-compliance-and-security-ins-article-ia/)
[5] (https://linfordco.com/blog/soc-1-vs-soc-2-audit-reports/)
[6] (https://secureframe.com/blog/soc-1-vs-soc-2)
[7] (https://secureframe.com/hub/soc-2/soc-1-vs-soc-2-vs-soc-3)
[8] (https://www.wipfli.com/insights/articles/ra-soc-1-vs-soc-2-whats-the-difference)
[9] (https://biztechmagazine.com/article/2024/07/soc1-vs-soc2-perfcon)
[10] (https://www.reddit.com/r/CPA/comments/15c0k6z/soc_1_2_report_help/)