Inherent Risk vs. Control Risk: What’s the Difference?

Any company that processes or stores personal consumer data has likely encountered the System and Organization Controls Report (SOC 2), formerly known as Service Organization Controls, and the Payment Card Industry Data Security Standard (PCI DSS).

These two sets of requirements can appear similar at first glance, but several key differences set the two apart.

Neither standard is required by law, but non-compliance with either one has considerable consequences. For example, if your business isn’t PCI DSS-compliant, you run the risk of having your credit card processing privileges revoked.

A company without an up-to-date SOC 2 report might lose business to rivals that can demonstrate that their customer data is safe, which a SOC 2 report helps to do.

It’s essential for your company to understand the differences between these two standards and to know which aspects of each are required for your overall risk management.

So, what’s the difference between SOC 2 and PCI DSS compliance?

What Is a SOC 2?

SOC 2 reports are comprehensive reviews of your organization’s data security controls according to standards determined by the American Institute of Certified Public Accountants (AICPA). There are several kinds of SOC reports—most notably SOC 1 and SOC 3, which use the same trust services criteria as SOC 2. The SOC 2, however, contains more sensitive data and is meant to be confidential; SOC 3 reports are designed to be certified and shared.

The trust services criteria of the SOC 2 are derived from five fundamental principles: 

  • Security: All procedures and security controls included in an organization’s defense against data breaches should be effective and tested regularly. 
  • Availability: Systems and information should be accessible to staff and clients in accordance with the company’s purpose and goals. 
  • Processing Integrity: System processing must meet the company’s and user entities’ objectives while remaining accurate and efficient. 
  • Confidentiality: Any confidential information should be appropriately shielded from access by unauthorized parties. 
  • Privacy: Any information connected to an individual’s identity should be stored and disposed of securely. 

Security is the most important of these principles; the rest can be examined case by case. While preparing for a SOC audit, companies should consider which principles matter most to their clientele. Ask yourself if non-compliance with each principle would harm the relationship with your client. If so, that principle must be addressed in the SOC 2 audit.

What Is the PCI DSS? 

The major credit card providers developed the PCI DSS to protect cardholder data from companies that process credit card information. There are 12 primary PCI compliance requirements. Those prior requirements are divided into 281 sub-requirements, which may or may not apply to an organization based on the volume of transactions it performs annually and how those transactions are processed.

Companies must validate their compliance with PCI DSS to process transactions, and any part of their network that is found not to be PCI compliant in the event of a breach could lead to heavy monetary penalties.

What’s the Difference Between PCI DSS and SOC 2?

The primary difference between PCI DSS and SOC 2 is that the former only applies to businesses that process payment card data; the latter applies to any company that processes or stores personal consumer information. So, some overlap exists between the two standards, but SOC 2 applies to more organizations than PCI DSS.

Another difference is the kind of professional allowed to conduct each audit. SOC 2 examinations can only be performed by CPA firms. At the same time, PCI DSS compliance is proven by either an audit from a Qualified Security Assessor (QSA) or a Self-Assessment Questionnaire (SAQ). PCI DSS assessments must also be accompanied by an attestation from the bank that performs the company’s financial transactions. 

Finally, SOC 2 allows much more flexibility in adhering to its trust service principles. A company striving to meet SOC 2 compliance standards can tailor its business and security strategies to meet its specific needs—for example, by choosing which of the five trust service principles to include in a SOC 2 audit. 

In contrast, the PCI DSS standard is far more prescriptive about what a business must do to secure payment card transactions. Future PCI DSS updates might offer some new flexibility but are far from what the SOC 2 standard allows.

Similarities Between PCI and SOC 2 Compliance

The PCI and SOC standards are two of the most important in the financial services sector. These two sets of regulations share many similarities in that they both strive to protect customers against theft, fraud, and other unlawful actions.

The PCI and SOC 2 standards demand an annual evaluation of the controls to assure compliance. These evaluations must be carried out by a certified third-party auditor approved by the relevant regulating authority.

Risk analysis, vulnerability scanning, testing, and remediation are all included in the PCI and SOC 2 compliance audits. However, the scope of each audit varies greatly.

For example, the PCI audit simply evaluates the technical components of the organization’s infrastructure; instead, the SOC 2 audit covers all of the organization’s business processes and procedures.

Implementing the Right Compliance Standards for Your Business

Whether your organization must comply with SOC 2 or PCI DSS requirements—or both—it is necessary to analyze the criteria that must be met. These rules were implemented to safeguard all parties and guarantee that your firm provides the most significant security feasible for your client’s sensitive data.

SOC 2 and PCI DSS are distinct standards that apply to various enterprises. SOC 2 reports follow the AICPA’s Statement on Standards for Attestation Engagements (SSAE 18) and apply to organizations that hold, store or process customer data.

In contrast, PCI DSS is a standard administered by the Payment Card Industry Security Standards Council (PCI SSC) and applies to organizations that accept, store, process, or transmit cardholder data.

Maintain Compliance with PCI and SOC 2 with Help from ZenGRC

Data security must be integrated into all elements of your organization, regardless of regulatory restrictions. Even though most consumer legal requirements do not address data privacy, you progressively exchange data with other parties to improve asset performance.

Our compliance software, ZenGRC, provides a solid basis for Corporate compliance. It also allows you to follow the evolution of your program over time to ensure compliance and prevent non-compliance sanctions.

Stakeholders, personnel, and compliance managers can gain access to a central source of truth for all of your current and future PCI requirements with ZenGRC.

ZenGRC’s intuitive dashboards show you what threats must be mitigated at a glance, manage procedures, collect and store documents required during audits, and much more.

Request a demo today to learn how ZenGRC can assist your PCI compliance program.