Compliance for SaaS (Software as a Service) providers can seem pretty complicated at first, but understanding the basics of System and Organization Controls (or SOC) certification is an ideal first step toward enhancing cybersecurity, mitigating risk, building trust with customers, and preventing unauthorized access to sensitive information.

This article delves into the fundamentals of SOC 2 Type 1, shedding light on its significance and implications within the industry. We’ll also distinguish between SOC 2 Type 1 and SOC 2 Type 2 controls and certification. Let's explore what SOC 2 Type 1 entails, how it differs from other SOC certifications, and how you can achieve compliance with the SOC framework.

What Is SOC 2 Type 1 vs SOC 2 Type 2?

SOC 2 Type 1 and SOC 2 Type 2 refer to sets of standards that are critical for SaaS companies, who must provide assurance to customers about the security and integrity of their sensitive information—as well as effective risk management strategies.

Before going on, it’s worth noting that these are not the only SOC controls a SaaS company needs to be aware of. There are really three different levels of SOC reporting: SOC 1, SOC 2, and SOC 3.

What Is the Difference between SOC 1 and SOC 2 and SOC 3?

While SOC 1, SOC 2, and SOC 3 reports all serve distinct purposes, understanding their differences is crucial for SaaS providers and their clients. SOC 1 reports focus on internal controls over financial reporting, while SOC 2 reports address controls related to security, availability, processing integrity, confidentiality, and privacy. SOC 3 reports, on the other hand, are designed for broader public consumption and provide a high-level overview of a company's controls.

SOC 1 vs SOC 2 vs SOC 3: A Quick Guide

  • SOC 1 specifically applies to the internal financial controls an organization has in place. And within SOC 1, there are two types of audits that may occur:

    • SOC 1 Type 1 audits provide a “snapshot” in time assessment of internal controls over financial reporting.

    • SOC 1 Type 2 audits, by contrast, consider the effectiveness of internal controls over a specific time frame (rather than a single moment in time).

  • SOC 2 focuses on controls relevant to the five Trust Services Criteria: security, availability, processing integrity, confidentiality, and privacy.

  • SOC 3 is different from SOC 1 and SOC 2 in that it’s a public-facing and somewhat stripped-down version of a SOC 2 report. Compared with the other SOC levels, SOC 3’s primary use case is less about regulatory compliance and more about demonstrating to the general public that an organization is a responsible services provider.

What Is SOC 2 Type 1 Used For?

SOC 2 Type 1 certification assesses the design and implementation of a SaaS provider's controls at a specific point in time. It evaluates whether the controls are suitably designed to meet the specified criteria.

Unlike SOC 2 Type 2, which involves testing the effectiveness of controls over a period of time, Type 1 reports provide a snapshot of controls at a given moment.

What Does a SOC 2 Type 1 Report Contain?

Generally, typical SOC 2 Type 1 report example will contain either four or five sections:

  1. Management assertion, in which the organization gives a holistic overview of their product and services, and (more importantly) details like their IT infrastructure and systems, team structure and roles, access controls, and risk management protocols.

  2. Independent audit, which is completed by a third-party and determines whether the organization’s controls are considered unqualified, qualified, or adverse.

  3. System description, which is written by an organization’s own management team before it’s reviewed by the auditor or auditing committee. It includes details like the company background, service commitments, system features and boundaries, incident history, and more.

  4. Controls description and test results, in which the auditor describes and supports their opinions (based on their review of the system description, as detailed above). Individual controls are tested in order to determine their effectiveness.

In certain cases, there may be a fifth element of a SOC 2 Type 1 report, in which management has an opportunity to respond to specific points in the auditor’s assessment.

Where Can I See a SOC 2 Type 1 Report Example?

The AICPA provides a template/layout you can use when creating your own reports, or to better understand the components of these reports. It can be found here.

How Do I Get SOC 2 Type 1 Certification?

To obtain SOC 2 Type 1 certification, SaaS companies need to engage a qualified auditor who will assess their control environment against the Trust Services Criteria established by the American Institute of CPAs (AICPA). The process involves:

  • Assessing the suitability of control design

  • Providing evidence of implementation

  • Issuing a SOC 2 Type 1 report

For further insights, it's essential to distinguish between SOC 2 Type 1 and Type 2 certifications, as well as understand the contents of a SOC 2 Type 1 report.

Take Your SaaS Security to the Next Level!

At Trava, we understand that embracing compliance standards not only enhances security but also strengthens the reputation and credibility of SaaS providers in an increasingly competitive market. And while we know it can be challenging sometimes, we also know that SOC 2 Type 1 certification is integral for SaaS providers looking to demonstrate their commitment to security and compliance. We’ve designed our versatile platform with these challenges in mind.

For SaaS companies seeking SOC 2 Type 1 certification, partnering with experienced auditors and dedicating resources to the implementation of robust controls is essential.

When you’re ready to embark on your compliance journey, contact us today to learn how we can help you achieve SOC 2 Type 1 certification and elevate your SaaS business to new heights of security and trustworthiness.