The American Institute of Certified Public Accountants (AICPA) made a set of rules called the SOC framework, which stands for System and Organization Controls. You have three kinds of SOCs, as mentioned by AICPA. When deciding what level of compliance your business needs, know the differences between SOC 1, SOC 2, and SOC 3. 

SOC 1 assesses an organization’s internal controls concerning financial reporting, while SOC 2 and SOC 3 investigate the organization’s management of one or more Trust Services Criteria. Unlike SOC 2, SOC 3 is not a confidential report and is employed to demonstrate the effectiveness of an organization’s internal controls publicly.

In this article, we’ll break down SOC 1, SOC 2, and SOC 3 in simple terms so you can easily understand the key differences between them. You’ll gain a clear picture of how these relate to an organization’s controls and reporting.

What Is a SOC 1 vs. SOC 2 vs. SOC 3 Report?

The American Institute of Certified Public Accountants (AICPA) requires service providers to have a CPA independently audit their systemic controls, such as those listed below.

  • Protection of Information
  • Cyber-safety
  • Secrecy
  • Integrity of processing
  • Financial reporting controls

Getting a SOC report gives you an advantage over competitors that is worth the time and money. SOC 1 & SOC 2 are commonly used SOC reports, but two other types are available. Let’s know more about SOC 1 vs SOC 2 vs SOC 3.soc report comparison

SOC 1 reports are mostly financial reporting, while SOC 2 reports focus more on adherence and functioning. Where SOC 3, on the other hand, is used less often and is a class of SOC 2 to meet the needs of the organization’s customers.

SOC 1 vs. SOC 2 vs. SOC 3 Reports

Many people want to know if SOC 3 is better than SOC 2. Is it possible to get a SOC 2 report without a SOC 1 report?

SOC1, SOC2, and SOC3 are all kinds of reporting. The numbers don’t show a specific order or a higher level of quality.soc1-2-3-comparison-chart

The good news is that you don’t have to wait for SOC 1 audit to finish before you start with SOC2. And getting a SOC 3 isn’t more complex or difficult than getting a SOC 2.

All about SOC 1

A SOC 1 report, which the AICPA made for third-party providers, may give your customers confidence that their economic data is in good hands.

Kinds of SOC 1

For SOC 1, you can get Type 1 and Type 2 reports. Likewise, a SOC 1 Type I shows that your company’s internal fiscal measures are well-documented and made at a specific time. Similarly, a SOC 1 Type 2 report looks at how well the standards work over a certain period.

kinds of soc 1

Advantages of SOC 1 compliance

A Service Organization Controls (SOC) study evaluates how well your organization controls its compliance, functioning, and fiscal reporting. It is done by a third-party, not part of your firm. It’s a great way to gain and maintain the trust of clients.

  • Furthermore, it shows your customers can trust you with their private
  • Analyses all business’s most important techniques.
  • Check if your organization has the processes and control measures to give customers excellent service consistently.

A crucial point to note here is that SOC 1 audit does not review your accounting records. Instead, it is an examination of your internal controls over financial reporting.

All about SOC 2

SOC 2, with safety in mind beyond SAS 70, became a popular measure of how well a company’s security policies work.soc 2 certification

With the SOC 2 framework, an organization can show how secure its network infrastructure and cloud system are. The AICPA says the following about the Trust Services aspects, on which SOC 2:

Availability: Ability to use the system.

Confidentiality: Needs extra steps to keep particular information secret.

Privacy: Any sensitive information must be carefully collected, stored, shared, and eventually thrown away.

Processing security: All system processing must be precise and sensitive.

Security: To ensure that systems and information are safe and protect them from possible threats. That could hurt their privacy, integrity, anonymity, or accessibility.

The kinds of SOC 2 

Type 1 & Type 2 reports are available in SOC 2, like for SOC 1. For compliance purposes, a SOC 2 Type 1 audit only looks at how appropriate and effective design controls are at a single moment.soc 2 types

Likewise, SOC 2 Type 2 compliance audits take service providers more time and work because they look at how well controls position over a longer time, like six months/ year.

Some of SOC 2 Compliance benefits

Compliance reporting, regulatory oversight, and internal risk management can’t happen without a SOC 2 audit. Any client can request a SOC 2 audit, which requires more information and assurance about the service provider’s controls.

Compliance with SOC 2 standards ensures the following:
  • Your company’s information security is up-to-date with current standards for protecting information stored in the's security
  • The system is always available and does what it should at the right time.
  • You have the systems, various tools, and procedures to keep private information about your clients from getting into the wrong hands.

Things You Need To Know About SOC 3

The AICPA suggests making a SOC 3 report if a service provider doesn’t know how to use a SOC 2 report but still needs to ensure people are safe and their needs are met.


SOC 3 reports are Type II reports, never detailing how the auditor tested controls. It is the same as 2, but it’s easy enough for more people to understand. Businesses often put seals or stamps on SOC 3 reports to show compliance.

The main differences between SOC 1 vs. SOC 2 vs. SOC 3- The most common types of SOCs are the first two, while the last type cares about technology organizations the most.

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Are SOC 2 and SOC 3 same?

SOC 2 reports are private, which means they are typically shared only with customers and prospects under an NDA. SOC 3 reports are general use reports that can be distributed freely or posted to the public on an organization's website.

Is SOC 2 better than SOC 3?

SOC 3 reports are more for general use purposes and don't contain as much detail as SOC 2 reports.

What type of businesses use SOC 3?

SOC 3 report is a general use report that is freely distributed to the public and is intended for users that are only interested in a broad overview of the service organizations and the service being provided.

How many SOC levels are there?

There are three different SOC report types, although, in most cases, organizations choose between a SOC 1 and SOC 2 report.


SOC 1 vs SOC 2 vs SOC 3, should you choose whether your controls affect a client’s internal control over financial reporting? Service providers may find it hard to decide which of the most popular reports is best for their business. Yet each SOC report serves a unique function.

Certain people can only use a SOC 2 audit report. It has information on the systems and controls used to keep data safe. If you are SOC 2-compliant and aren’t sure if you need a SOC 3 audit report, remember that SOC 3 is a generic report, but it’s an excellent way for anyone to market their business. But knowing more about SOC compliance is essential – When to get it? Which SOC 1 vs SOC 2 vs SOC 3 report best fits? 

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Kaushal Malkan
You can always find me playing the piano or playing FIFA when I'm not binge-watching TV Series with pizzas. Fountainhead of TechWhoop. Life motto: The only time success comes before work is in the dictionary.