> SOC 1 vs SOC 2: What’s the difference, what you need, and what it costs 

SOC compliance can be complicated and time consuming for organizations.  If you’re currently investigating it, we’ve compiled an extensive guide to help you understand the core aspects. In this guide we explain the difference between SOC 1 vs SOC 2, why you might need one over the other, how SOC audits work, and whether SOC 3 is worth considering.  SOC 1 vs SOC 2 vs SOC 3 What’s the difference between Type I and Type II SOC reports? What is SOC 1, who needs it, and why? What is SOC 2, who needs it, and why? What is SOC 3, who needs it, and why? Which companies need multiple SOC reports? How do SOC audits work? Timelines, costs, and resources How much does a SOC audit cost? How Proton can help you complete SOC audits Tips for SOC audits FAQ SOC 1 vs SOC 2 vs SOC 3 SOC reports may sound like tiers of the same type of report, but they’re not. They’re actually three different reports built for three different audiences. So when you’re comparing them, it’s not about which one is better, but which one is better suited to your needs. SOC 1 is for companies whose services touch a customer’s financial reporting, like payroll processors, claims administrators, or fund administrators.  SOC 2 is for companies handling customer data, like SaaS, cloud, and technology vendors.  SOC 3 is a public-facing summary of a SOC 2 report. It uses the same underlying criteria, but without the sensitive technical detail, so it can be shared freely. Why get a SOC audit? Customers need proof that your company can be trusted with their data, but auditing every vendor individually can be slow and expensive for everyone involved. Your organization’s customers are the intended audience for the report.  Developed by the American Institute of CPAs (AICPA), a SOC audit enables a company to go through that process once with an independent CPA firm, then hand the resulting report to a potential customer, instead of filling out a new security questionnaire for every opportunity. In regulated or security-conscious industries like finance and healthcare, a SOC report often determines whether your company makes it onto a vendor shortlist at all.  A SOC audit also pushes companies to implement real security controls, like access management, monitoring, and incident response, along the way. So while the report exists to satisfy customer procurement teams, the process behind it builds your security practices, regardless of who’s reading the report. Because SOC reports reveal detailed information about company processes and infrastructure, companies generally require customers to sign an NDA before the report can be shared.  Comparison table: SOC 1 vs SOC 2 vs SOC 3 SOC 1SOC 2SOC 3FocusInternal controls over financial reportingSecurity, availability, processing integrity, confidentiality, and privacySame criteria as SOC 2, but summarizedGoverning standardSSAE 18 (AT-C 320)SSAE 18 (AT-C 105/205)SSAE 18 (AT-C 105/205)Typical audienceAuditors, regulators, and the customer’s finance/accounting teamsCustomers’ security, IT, and procurement teamsGeneral public / prospective customersReport distributionRestricted: Shared under NDA with specific stakeholdersRestricted: Shared under NDA with specific stakeholdersPublic: Can be posted or shared freelyExample companiesPayroll providers, claims processors, fund administratorsSaaS platforms, cloud providers, data centersCompanies that have a SOC 2 and want a shareable versionReport types availableType I and Type IIType I and Type IINot applicable What’s the difference between Type I and Type II SOC reports? There are two types of reports available for SOC 1 and SOC 2 audits, and this is where comparisons become more useful.  A Type I audit examines the paperwork, policies, and system designs a company has put in place and assesses whether those controls are appropriately designed to protect data. It doesn’t test whether the safeguards actually work over time, it just confirms they’re there and look correct. A Type II audit examines paperwork, policies, and system designs, then monitors their operation continuously over a period of 3 to 12 months. The auditor verifies that the controls are not only well‑designed but also effectively followed; that the company keeps logs, makes backups, monitors access, and handles incidents as promised.  Customers and partners usually trust a Type II audit more because it demonstrates ongoing, real‑world security performance. Unlike SOC 1 and SOC 2, which just serve different audiences, a Type II audit can be considered stronger than a Type I.  What is SOC 1, who needs it, and why? SOC 1 is a compliance and auditing framework for companies whose services affect their customers’ financial reporting. SOC 1 satisfies the needs of customers’ external auditors and provides assurance that a service organization’s controls won’t introduce errors into its customers’ books.  What types of companies benefit from SOC 1 attestation? SOC 1 is the go-to attestation for companies that handle financial transactions or data on behalf of others. This includes payroll processors, payment processors, fund administrators, claims processors, and loan servicing platforms. A SOC 1 can unlock new contracts with larger clients, reduce friction during annual audits, and reinforce a company’s reputation for reliable, well-controlled financial processes, which often determines whether your company is even considered for financially sensitive work. What is SOC 2, who needs it, and why? SOC 2 is a compliance and auditing framework for companies that handle customer data. A SOC 2 audit produces a report that documents how a company’s controls hold up against the AICPA’s Trust Services Criteria, covering security, availability, processing integrity, confidentiality, and privacy, along with an independent auditor’s opinion on whether those controls are properly designed. SOC 2 is a necessary attestation for companies that need to prove the effectiveness of their security controls to U.S. customers and partners.  What types of companies benefit from SOC 2 attestation? Companies that deliver technology‑enabled services will benefit the most from SOC 2 certification. This includes software‑as‑a‑service (SaaS), cloud infrastructure, data analytics platforms, fintech solutions, and health‑tech applications. With data breaches becoming the norm, customers need reassurance that a company can protect the data and systems they’re trusting them with. A SOC 2 provides this, which can then unlock new contracts with large corporations, simplify vendor‑risk assessments, and bolster a firm’s reputation for strong data protection.  Read about Proton’s SOC 2 Type II audit What is SOC 3, who needs it, and why? A SOC 3 is derived from the same audit process as a SOC 2, it just serves a different purpose. The SOC 3 report is a high-level summary of the same information, without the detailed and specific information that necessitates an NDA, so it’s often used as a public-facing summary of the SOC 2 report. What types of companies benefit from SOC 3 attestation? It’s not possible to get a SOC 3 without going through the SOC 2 audit process, but companies that are already being assessed  for a SOC 2 and want to use that information in marketing campaigns or sales decks may benefit from pursuing  a SOC 3 report.  Which companies need multiple SOC reports? Choosing between SOC 1 and SOC 2 is often a case of choosing which report suits your customers’ needs. However, some companies do need more than one SOC report. For example, a fintech company that processes payments and stores sensitive customer data might need both a SOC 1 (because it touches customers’ financial reporting) and a SOC 2 (because it handles customer data).  Combination of SOC audits Company typeSOC 1 + SOC 2Companies that handle both financial reporting and significant customer dataSOC 1 + SOC 3 NA (It’s not possible to get a SOC 3 without a SOC 2)SOC 2 + SOC 3Companies that handle significant customer data and want to demonstrate their SOC 2 attestation in public-facing contentSOC 1 + SOC 2 + SOC 3Companies that handle both financial reporting and significant customer data and want to demonstrate their SOC 2 attestation in public-facing content How do SOC audits work? Timelines, audit phases, and renewals There are a range of variables that will impact how costly and time-consuming a SOC audit is. Here are some of the factors to keep in mind if you’re planning SOC 1 or SOC 2 compliance. SOC timeline SOCTimelineSOC 1 Type I~ 2–4 monthsSOC 1 Type II~ 6–12 months total, observation window typically 6–12 monthsSOC 2 Type I~ 3–6 months totalSOC 2 Type II~ 6–15 months total, observation window typically 3–12 months  SOC audit phases  A SOC audit contains multiple phases that unfolds over weeks or months. Here’s what each stage looks like: 1. Prep (weeks 1–4) Before any testing begins, you identify which systems fall within scope and confirm which of the AICPA’s Trust Services Criteria apply. For SOC 2, that typically means security as the required criterion, plus any combination of availability, processing integrity, confidentiality, and privacy based on customer needs. You’ll also inventory the controls you already have in place,  like access policies, encryption standards, backup procedures, and incident response plans. The goal here is to avoid surprises later. 2. Documentation (weeks 4–8) You compile evidence that your controls exist and are properly designed. This includes written policies, system architecture diagrams, role-based access matrices, vendor risk assessments, and training records. The auditor will review these materials to ensure they cover all relevant requirements and align with what customers would reasonably expect. 3. Audit (weeks 8–12) For a Type I report, the auditor performs fieldwork around a single point in time. They interview key staff, sample control evidence, and verify that your documentation reflects reality. At this stage, they’re confirming that controls are designed correctly. 4. Observation (months 3–15) A Type II adds an observation window where the auditor monitors your controls continuously. During this period, they’ll examine things like: Access logs: who got permissions, when access was revoked, and whether privileged accounts were reviewed periodically Change management records: how code deployments were approved and tracked Incident handling: whether security events were detected, escalated, and resolved according to your documented process Backups and monitoring: evidence that systems are actually being monitored and restored as promised At the end of the observation period, the auditor issues their opinion on how well your controls operated throughout the entire window. SOC renewals Renewing your SOC attestation should generally be quicker than the first audit. Since your scope, controls, and system boundaries are already established, the auditor is building on a known baseline rather than starting from scratch, and many renewals are both cheaper and quicker than the initial audit. Reports are typically valid for 12 months, so most companies renew annually, often starting the next observation period right after the current one ends to avoid any gap in coverage.  How much does a SOC audit cost? It’s almost impossible to determine the cost of a SOC audit without getting a quote from a CPA, as they can range from as little as USD 5,000 to upwards of USD 150,000. The cost will depend on a number of factors, including the size of your organization, your organization’s readiness, how many resources you can dedicate to the process, and which type of audit you’re going for. Type I audits are generally less expensive, because they take less time.  How Proton can help you complete SOC audits Proton holds both ISO 27001 certification and SOC 2 Type II attestation, which can make it easier for companies that use Proton products to obtain their own accreditation. By using a secure, encrypted workspace, you inherit a proven security baseline that already meets the rigorous audits behind SOC 2 Type II. This can reduce the effort required to demonstrate compliance and shorten audit timelines. Sign up to Proton Workspace Tips for SOC audits Do as much prep work as possible before the audit starts. A lack of readiness can often slow down the process and increase costs. Define your system boundaries before fieldwork begins. Ambiguity about what’s actually in scope is one of the most common causes of delays. Choose your Type II observation window based on who’s asking for the report, not just how fast you want it. A  three month window gets you a report sooner, but many customers expect six months to a years’ worth of evidence and may push back on anything less. Assign clear control owners early. The biggest delays can happen while chasing down the right person internally for evidence, approvals, or interviews. Plan for renewals and treat evidence collection as an ongoing habit instead of a pre-audit scramble. Organizations that build continuous monitoring into their normal operations often have faster, cheaper renewals than those that treat each cycle as a one-off project. FAQ on SOC 1 and SOC 2 audits What are SOC 1 and SOC 2? SOC 1 and SOC 2 are both audit frameworks developed by the AICPA, but they serve different purposes. SOC 1 focuses on internal controls over financial reporting. It’s designed for companies whose services affect their customers’ financial statements, like payroll processors or fund administrators. SOC 2 focuses on security, availability, processing integrity, confidentiality, and privacy. It’s designed for technology and cloud service providers that handle customer data.  Do you need SOC 1 before SOC 2? No, SOC audits aren’t sequential, they’re just different, so you don’t need to complete a SOC 1 before you do a SOC 2. A SOC 1 is intended for businesses that perform financial reporting, while a SOC 2 audits a company’s security, privacy, and processing integrity.  How long does a SOC 2 audit take? A SOC 2 audit can take anywhere from three  months to over a year to complete, depending on whether you’re pursuing a Type I or Type II audit, the size and complexity of your organization, and the readiness of your team.  How much does a SOC 1 or SOC 2 audit cost? A SOC audit can cost between USD 5000 – USD 150,000 depending on the type of audit, the size of your organization, and the complexity of your systems.  Is SOC 2 a certification? No, a SOC 2 isn’t a certification, it’s an attestation. Although the terms are used interchangeably with SOC 1 and 2 audits, an attestation is more like a rating, while a certification is a pass/fail.  How often do you need to repeat a SOC 2?  A SOC audit doesn’t technically expire, as long as the systems remain unchanged, but the industry standard is to renew them every 6-12 months. Many companies set up a yearly renewal process, but it will depend on whether you’re pursuing a Type I or Type II audit, and if it’s Type II, how long the observation period is.  Can you get a SOC 3 without a SOC 2? No, a SOC 3 is derived from the same audit process as a SOC 2. A SOC 3 is an optional add-on to a SOC 2, not a separate process.