What is the difference between SOC 1 and SOC 2?

SOC 1 focuses on controls relevant to financial reporting (ICFR), while SOC 2 focuses on security, availability, processing integrity, confidentiality, and privacy. SOC 1 is typically required by clients’ financial auditors, while SOC 2 is required during vendor security reviews.

Who needs a SOC 1 report?

Any service organisation whose services affect clients’ financial statements may need a SOC 1 report. This is commonly requested by payroll processors, claims processors, financial transaction processors, and data hosting companies handling financial records.

Is SOC 1 the same as SSAE 18?

SSAE 18 (Statement on Standards for Attestation Engagements No. 18) is the auditing standard under which SOC 1 examinations are performed. SOC 1 is the report type; SSAE 18 is the standard that governs how the audit is conducted.

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42 Controls

SOC 1 Type II

Service Organization Control 1

SOC 1 (SSAE 18) reports on controls at a service organisation relevant to user entities’ internal control over financial reporting (ICFR). It is essential for service organisations whose services affect their clients’ financial statements.

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Ideal For

Payroll ProcessorsFinancial Service ProvidersCloud Hosting (Financial Data)Benefits Administrators

What is SOC 1 Type II?

SOC 1 (SSAE 18) reports on controls at a service organisation relevant to user entities’ internal control over financial reporting (ICFR). It is essential for service organisations whose services affect their clients’ financial statements.

SOC 1 applies to service organisations whose services are relevant to their clients’ financial reporting. Common examples include payroll processors, benefits administrators, financial transaction processors, and cloud hosting providers handling financial data. Clients often require SOC 1 reports to satisfy their own auditors.

Key Requirements

Core areas of SOC 1 Type II that organisations must address.

Define control objectives relevant to financial reporting

Implement and document control activities

Specify complementary user entity controls (CUECs)

Maintain evidence of control operation over the audit period

Engage a qualified CPA firm for the examination

Remediate and track any identified exceptions

How GRCTrack Supports SOC 1 Type II

ICFR-relevant control objectives

Control activity documentation

Complementary user entity controls

Type I and Type II reporting

Exception tracking and remediation

Financial audit integration

Client Confidence

Demonstrate sound financial controls to your clients.

Regulatory Alignment

Support Sarbanes-Oxley (SOX) requirements for clients.

Competitive Differentiation

Win and retain clients who require SOC 1 reports.

Frequently Asked Questions

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