SOC 2 Security vs. ISO 27001 Certification

On occasion, we hear variations of the following questions from clients and prospective clients:

  • What are the differences between a SOC 2 and an ISO 27001 audit?
  • Which standard is more applicable to our company, SOC 2 or ISO 27001?
  • What are the advantages and disadvantages of SOC 2 vs. ISO 27001?
  • Is there a mapping between SOC 2 and ISO 27001?
  • Where is the overlap between SOC 2 and ISO 27001?

What is a SOC 2?

What is a SOC 2?

The AICPA provides the following definition for SOC 2 – SOC for Service Organizations: Trust Services Criteria

Report on Controls at a Service Organization Relevant to Security, Availability, Processing Integrity, Confidentiality, or Privacy

These reports are intended to meet the needs of a broad range of users that need detailed information and assurance about the controls at a service organization relevant to security, availability, and processing integrity of the systems the service organization uses to process users’ data and the confidentiality and privacy of the information processed by these systems. These reports can play an important role in:

  • Oversight of the organization
  • Vendor management programs
  • Internal corporate governance and risk management processes
  • Regulatory oversight

Similar to a SOC 1 report, there are two types of reports: A type 2 report on management’s description of a service organization’s system and the suitability of the design and operating effectiveness of controls; and a type 1 report on management’s description of a service organization’s system and the suitability of the design of controls. Use of these reports are restricted.

A SOC 2 report is an attestation report that documents an organization’s internal controls that are in place to meet the SOC 2 criteria for Security, Availability, Processing Integrity, Confidentiality, or Privacy. Most SOC 2 reports are prepared for US based service organizations and shared with user entities of the service organizations. A SOC 2 report may be either a point-in-time report (type I) or cover a period of time (type II).

Linford & Company past SOC 2 related blog posts:

What is a ISO 27001?

What is ISO 27001?

ISO/IEC 27001:2013 specifies the requirements for establishing, implementing, maintaining, and continually improving an information security management system within the context of the organization. It also includes requirements for the assessment and treatment of information security risks tailored to the needs of the organization. The requirements set out in ISO/IEC 27001:2013 are generic and are intended to be applicable to all organizations, regardless of type, size or nature.

Wikipedia ISO 27001 Definition

The ISO 27001 certification validates that an organization meets a standard set of requirements. US based companies may be asked for an ISO 270001 certification although the certification has more traction in the European market. As a result, many US based companies choose to self audit against the standard without receiving a certification. Like many other standards, certification is possible, but not mandatory. This differs from the SOC 2 examination, which is required to be performed by a CPA firm.

See the following past blog post related to ISO: What is ISO?

 

SOC 2 vs. ISO 27001: What are the Key Differences?

 

The following table highlights some of the key differences:

AreaSOC 2 SecurityISO 27001
NameTrust Services Principles and Criteria for Security – The system is protected against unauthorized access (both physical and logical).International Standard ISO/IEC 27001, Second Edition 2013-10-01, Information technology — Security techniques — Information security management systems — Requirements
GovernanceAICPAANSI-ASQ National Accreditation Board (ANAB)
WorldviewNorth AmericanInternational
PurposeAssist service organization management in reporting to customers that it has met established security criteria that ensure that the system is protected against unauthorized access (both physical and logical).Assist organization management in establishment and certification of an Information Security Management System (ISMS) that meets specified requirements and is able to be certified as best practice.
Applicable toSystemISMS
StructurePrinciples and CriteriaInformation Security Framework
PracticesGood PracticeBest Practice
Best UseMeasure a Service Organization against static security principles and criteria.Establish, implement, maintain, and improve an ISMS.
“Certification”CPA Firm Attest Examination OpinionISO Accredited Registrar Certification
InfrastructureCPA/CA Firms WorldwideLots of consultants; few certifiers
Period CoveredPoint in time or period of timePoint in time
Nature of Audit or Certification TestingDesign effectiveness and operating effectiveness (Type II)Design effectiveness
ReportReport containing the auditor’s opinion, management’s assertion, description of controls, user control considerations, tests of controls, and resultsSingle page Certification
Difficulty to AchieveModerate DifficultyHigher Difficulty

 

Summary

In summary, ISO 27001’s purpose is to provide a best practice framework for establishing an information security management system. It is a guide for implementing a security program at an organization. In contrast, the SOC 2 Security’s purpose is to provide an organization a way to demonstrate that security practices are in place and operating effectively. When choosing between a SOC 2 or ISO 27001 certification, an organization should consider its regulatory requirements as well as which countries the organization plans to do business with. It is important to keep in mind a service organization’s clients when choosing which standards to comply with. A service organization’s clients may request a particular report or certification depending on its needs.

To facilitate a comparison between the standards, the Cloud Security Alliance has provided a matrix that maps the ISO 27001 requirements to the SOC 2 criteria. See the Cloud Security Alliance Matrix

Both SOC 2 and ISO are internationally recognized standards. Both the SOC 2 report and ISO certification involve an independent audit by a third party. Both may be used for marketing purposes to demonstrate that an IT internal control environment is in place. ISO certifications are three year forward looking certifications while SOC 2 reports are point-in-time or period-of-time reports.

11 thoughts on “SOC 2 Security vs. ISO 27001 Certification

  1. Hi NIda JB, thanks for your response. SOC 2 does not require ISO 27000 or 27001, however, a SOC 2 report may include many of the same controls that would be required for ISO compliance.

  2. If given the choice to choose between only a SOC 2, Type 2 or an ISO 27001 security certification for a critical vendor, what would you recommend and why? The SOC 2, Type 2 seems superior because of the extra testing that should be completed but I was curious what your take was.

  3. You state that ISO27001 is a point in time assessment. Whilst each audit is point in time they are sampling audits that cover a cross-section of the standard. These are intended to test the continued adherence of the organisation to ISO27001 management controls and the techncila controls they have selected to address identified information security risks. Certification is normally for a threee-year period with a cycle of supervisory audits. Certified organisations must also continuously conduct their own internla audit work to evidence that they are effectively operating AND continually improving their ISMS.

  4. Hello,

    What is the difference between SOC2 and CMMI. If a company is CMMI certified would it place them in better category to comply with SOC2 ?

  5. One question I have pondered for a while is whether the SOC 2 exam or ISO cert provides a higher degree of assurance. You indicate ISO is more difficult to achieve, but how is that possible if Operating Effectiveness testing is not performed on ISO? Wouldn’t the sampling and operating effectiveness testing be more difficult to pass than an existence test? In essence, the existence of a procedure is easy to put in place but adhering to that over time is more difficult. So I am wondering why the belief exists that ISO is harder than SOC (when done properly)?

  6. Hello,
    ISO 27001 / 27002 is more comprehensive than SOC 2.
    At the final of the ISO audit you do get an auditor report with findings. Chapter 12 in the ISO is for Operations and there are many more mismatch regards to ISO.

  7. Does ISO certification require the auditor to perform sample testing (25+ transactions) to prove that controls were operating effectively? Or is it a validation of the implementation of controls and policies?

  8. If a company has ISO27001 certification for last many years, means it is has well established practices and operating effectiveness and Effective Controls are there for Security, Availability, Integrity, Confidentiality, or data Privacy , then :
    Q1: Does it still require SOC-2, when ISO27001 is far difficult to get (as stated in the article above)
    Q2 : If the answer to Q1 is yes, then what is the additional control / area that SOC-2 expects?

    please explain.

    thanks in advance

  9. Hi Sunil, Thank you for your comment. The answer as to whether a SOC 2 may still be needed is whether the user entities of your services require a SOC 2 report rather than an ISO certification. In addition to maintaining an effective information security control environment, you are trying to satisfy your report users and stakeholders. While there is significant overlap between ISO 27001 and SOC 2, the reports are for different stakeholders. Your ISO certification likely satisfies your EU clients, but some of your US clients may still want to see a SOC 2 report which must be performed by a US CPA firm that is licensed by the AICPA. I am happy to discuss further with you at your convenience. Thank you.

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