What is SOC 2, and does your company need it?
What a SOC 2 report is, when customers start asking for one, common mistakes, and how it compares to ISO 27001, HIPAA, PCI DSS, and other standards.
Sooner or later, a customer’s security team asks for your SOC 2 report. If you sell to other businesses in the US, it’s one of the most common requests you’ll get. This covers what SOC 2 is, when you need it, and how it compares to other security standards.
What SOC 2 is
SOC 2 is an audit of how you protect customer data. It was created by the AICPA, the US accounting body, and an independent CPA firm performs it.
The auditor checks your controls against the Trust Services Criteria. Security is always included. Availability, processing integrity, confidentiality, and privacy are optional, and most companies add them only when customers ask.
The result is a report, not a certificate. Customers usually get it under an NDA. There are two types:
- Type I checks whether your controls are designed properly on a single date. It’s faster and a common first step.
- Type II checks whether those controls worked over a period of time, usually three to twelve months. Most larger customers want this one.
When you need it
You probably need SOC 2 when a customer asks for your report, security questionnaires keep slowing down deals, or you handle customer data and sell to mid-size or large companies.
You probably don’t need it yet if nobody has asked. A clear security page and good questionnaire answers can carry you until a customer requires a report.
How it compares to other standards
| Standard | What it is | Who usually needs it |
|---|---|---|
| SOC 1 | An audit of controls that affect your customers’ financial reporting | Payroll, billing, and other financial services |
| SOC 3 | A short public summary of a SOC 2 report | Companies that want something to post on their website |
| ISO 27001 | An international certification for a full security program | Companies selling into Europe or to large global enterprises |
| HIPAA | A US law for protecting health information, with no official certification | Anyone handling patient data, including vendors to healthcare |
| PCI DSS | A payment card standard, checked by self-assessment or an outside assessor | Anyone who stores, processes, or sends card data |
| HITRUST | A certifiable framework that combines several standards | Vendors selling to hospitals and health insurers |
Two notes:
- HIPAA isn’t a certificate. “HIPAA certified” usually means an assessment was done. Many health-tech companies use a SOC 2 report that also maps to HIPAA.
- PCI DSS can be small. If a provider like Stripe handles card numbers, your PCI work is usually a short self-assessment.
Mistakes I see teams make
- Buying a compliance tool before scoping. Vanta and Drata are useful, but they’ll show you 200 failing checks without telling you which ones matter.
- Copying policies nobody follows. Auditors test what you do, not what you wrote. A short policy you follow beats a long one you don’t.
- Scoping too wide. Your first audit doesn’t need every system. Scope it to the product customers are asking about.
- Treating it as a one-time project. Type II reports renew every year, so the controls have to keep running. Build them into how you already work.
Where to start
Find out which report your customer needs and by when. Then do a gap assessment: compare what you do today against the criteria and list what’s missing. From there you can fix the gaps, pick an auditor, and plan the audit.
I’ve taken an IT department through SOC 2 Type II and know where small teams get stuck. If a customer is asking for a report, compliance and audit readiness is how I help.