Organizations rely on a host of standards to help them achieve regulatory compliance. Among the most popular are SOC 2 and ISO 27001 – standards that might seem similar at first glance, and do support each other in certain ways; but do serve distinct purposes.
SOC 2 and ISO 27001 complement each other by giving you a strategy for securing your information landscape and for demonstrating the security of your environment. Understanding how ISO 27001 compliance can enable successful SOC 2 reports will help you craft a business strategy that propels your organization forward.
SOC 2 vs. ISO 27001: Choosing the Right Standard for Your Organization
What Is ISO 27001 Compliance?
Designed by the International Standards Organization (ISO), ISO 27001 spells out industry standards for an information security management system (ISMS). The ISO 27001 statement of applicability focuses on preserving the confidentiality, integrity, and availability of information as part of the risk management process.
Since ISO 27001 lists a series of controls in Annex A, it creates a flexible approach to security. These control sets offer management the option to avoid, transfer, or accept risks, rather than mitigate those risks through controls.
What Is an ISMS?
An organization’s ISMS should encompass data, technology, cybersecurity, and employee behavior. For example, employee security awareness and password protection awareness should be part of the overarching data protection corporate culture.
While ISO 27001 requires the creation of an ISMS, it only suggests actions; it does not require specific security controls. These ideas include internal audits, continual monitoring, and corrective or preventive measures. How an organization implements these suggestions is at the organization’s discretion.
What Is a SOC 2 report?
A Service Organization Control report, or SOC report, comes in three varieties. Your organization can use these reports to review potential third-party service providers working with you; or share the reports with your customers to review your company’s information security controls as part of their vendor management program.
While SOC 1 reports are traditionally used to prove controls over financial reporting, SOC 2 incorporates “trust services criteria” (TSC) for general IT controls. These reports can assure your upstream and downstream customers that you have security standards in place to protect the data they entrust to you.
SOC 2 reports can be Type 1 or Type 2 reports. A Type 1 report focuses on management’s description of the company’s internal controls and effectiveness at one point in time. The auditor then prepares the report, interpreting this description in their professional opinion.
A SOC 2 Type 2 report is more in-depth, look at the effectiveness of internal controls across a longer period of time. Management must provide documentation proving the effectiveness of controls throughout the audit period. This longer-term assurance provides customers with additional details when assessing your data security measures, but is also more time-consuming and costly.
For more detailed information on SOC 2, check out this comprehensive SOC 2 guide.
How Does ISO 27001 Compliance Lead to a Successful SOC 2 Report?
As part of the SOC reporting process, your organization must show that it meets the documentation requirements established by the AICPA, as spelled out in Statement on Standards for Attestation Engagements (SSAE) 18.
SSAE 18 requires a review of your vendors, as well as your controls, to show how your ISMS helps to protect your organization and your data. Assessing both external and internal risks requires a holistic focus on information security.
Using ISO 27001 ISMS as the foundation for your security management means that you are already performing many of the activities necessary for a successful SOC 2 audit under the SSAE 18 attestations.
What ISO 27001 Says about Vendor Management
Part of the vendor management process under ISO 27001 is assuring that you establish appropriate service level agreements (SLA) with vendors to protect all data within your ecosystem. These clauses help you prove that not only your data, but also your customer data is safe.
Next, assure that your vendors maintain safe data environments as promised in the SLAs. This requires you to monitor your vendors’ activities continuously. In many ways, you’re auditing your vendors to verify that they live up to their promises.
The most crucial aspect of any vendor relationship, however, lies in your control over your information. Despite contracts and monitoring, your company needs to establish access controls and monitor those as part of your daily operations. Vendors should have the least access to your data environment as required to do their jobs successfully.
How ISO 27001 and SOC 2 Work Together
ISO 27001 focuses on your control over your data and your vendors. Just as you use SOC 2 reports to review your vendors, your clients review your compliance with the SOC 2 reports that you provide to them.
In addition, ISO 27001 offers risk-based guidance for data protection. By focusing on the assets most relevant to your company, you develop internal controls tailored to your business. ISO 27001 also establishes a roadmap so your auditor can meet the Statement on Standards for Attestation Engagements 18 (SSAE 18) requirements.
While all this tracking, monitoring, and auditing serves an essential purpose, it does require voluminous documentation. Managed inefficiently, this vital task can begin to feel like an avalanche.
How Does the Audit Process Compare for ISO 27001 vs. SOC 2?
The ISO 27001 audits the design (Stage 1) and operating effectiveness (Stage 2) of your information security management system at a point in time. In contrast, the SOC 2 audit process verifies the design of controls at a point in time (Type 1) or controls’ design and operating effectiveness over time (Type 2).
There are variations in the performance of the audit as well. The ISO 27001 certification process must be finished by a recognized ISO 27001-accredited certification authority. In contrast, a CPA (certified public accountant) is the only person who can complete a SOC 2 attestation report.
Additionally, there is a slight change in the appearance of certification. The ISO 27001 audit results in a certificate of conformity for the organization, while the SOC 2 audit results in a formal attestation of compliance.
Should You Get ISO 27001 Certification or SOC 2?
Consider obtaining one of the ISO 27001 or SOC 2 certificates if your business works with data, IT, or cloud services. While making that decision, you should also consider your geographic location and those of your clients. For example, SOC 2 is more prevalent in North America than the ISO 27001 international standard.
Although considerable fees are involved, not getting a certification may scare off potential clients. Contact multiple auditing firms to obtain some rough estimates. Remember, there are ongoing recertification costs, too: annually for SOC 2, and every three years for ISO 27001.
Additionally, you’ll need to schedule time for your staff members to participate in annual audits. It could be more sensible to use ISO 27001 if your costs for both will be roughly equal, since ISO 27001 only needs to be recertified every three years, rather than SOC 2’s annual requirement.
Given that the security requirements for both are essentially the same, it is best to consider your customers’ expectations, along with expenses over time. You may then choose which one is the most appropriate for you.
Automate ISO 27001 and SOC 2 Compliance with Reciprocity ZenComply
Managing ISO and SOC compliance can be overwhelming when tracking all requirements on spreadsheets.
Reciprocity ZenComply is a compliance and audit management solution, delivering a faster and easier path to compliance. It’s a turnkey solution, pre-loaded with requirements for various compliance and security frameworks, including the ISO 27001 standard and SOC 2. Templates for risk assessments and automated workflows eliminate tedious manual processes.
The document repository is a single source of truth, ensuring your audit evidence is quickly available for the next external audit and meeting SSAE 18 attestation requirements. Insightful reporting and dashboards provide visibility to regulatory gaps and security risks.
Schedule a demo to see how Reciprocity ZenComply can help you achieve and maintain compliance.