SOC 2 vs ISO 27001: Key Differences Between the Standards

Cyberattacks are a constant threat, which means that robust cybersecurity measures are a necessity for organizations of all sizes. Companies typically implement those measures by following one or more cybersecurity frameworks, and the frameworks you choose can have far-reaching implications for your security posture.

Two of the most popular frameworks are the SOC 2 and ISO 27001 standards. Understanding the differences between them is crucial for making an informed decision that aligns with your organization’s unique needs and goals. 

SOC 2 vs. ISO 27001: Choosing the Right One

What Is ISO 27001?

Developed by the International Standards Organization (ISO), ISO 27001 defines a set of standards for an information security management system (ISMS). The standard includes “Annex A,” which offers a long list of security controls a CISO can choose from, while the ISO 27001 statement of applicability is where the CISO describes the controls he or she has decided to implement, based on the unique needs of your organization.

What Is an ISMS?

As the name implies, an ISMS is the system you use to manage information security. This includes data management, cybersecurity, and employee behavior. 

While ISO 27001 requires the creation of an ISMS, it only suggests possible actions; it does not require specific security controls. These possible actions include internal audits, continual monitoring, and corrective or preventive measures. How an organization implements these suggestions is at the organization’s discretion.

What Is SOC 2?

SOC 2 is a standard developed by the American Institute of Certified Public Accountants (AICPA) to assess the security of technology providers and other “service organizations.” 

SOC 2 relies on five “Trust Services Criteria” (TSC) to assess the provider’s IT controls, and a SOC audit results in a SOC 2 report about the strength of the provider’s cybersecurity. Businesses can then use those SOC 2 audit reports to evaluate whether the provider can be trusted with their confidential data.

These reports can assure your upstream and downstream customers that you have security standards to protect the data they entrust to you.

SOC 2 reports can be either Type 1 or Type 2 reports. A Type 1 report focuses on management’s description of the provider’s internal controls and effectiveness at one point. 

Type 2 report examines the effectiveness of internal controls over an extended period of time. Management must provide documentation proving the effectiveness of controls throughout the audit period. This longer-term assurance gives customers additional details when assessing your data security measures, but it is more time-consuming and costly.

For more detailed information on SOC 2, check out this comprehensive SOC 2 guide.

How Does ISO 27001 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 and your controls to show how your ISMS helps 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 have already performed many 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 customers’ 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.

Your control over your information is the most crucial element of any vendor relationship. Despite contracts and monitoring, your company needs to establish and monitor access controls as part of your daily operations. Vendors should have the necessary access to your data environment to do their jobs successfully — but no access beyond that.

How ISO 27001 and SOC 2 Work Together

ISO 27001 focuses on your control over your data and vendors. Just as you use SOC 2 reports to review your vendors, your clients review your compliance with the SOC 2 reports you provide.

In addition, ISO 27001 offers risk-based guidance for data protection. By focusing on your company’s most relevant assets, you develop internal controls tailored to your business. ISO 27001 establishes a roadmap so your auditor can meet the requirements of the Statement on Standards for Attestation Engagements 18 (SSAE 18).

All this tracking, monitoring, and auditing does serve an essential purpose, but it also requires voluminous documentation. Manage those documentation tasks inefficiently, and they will soon feel like an avalanche. 

How Does the Audit Process Compare for ISO 27001 and SOC 2?

ISO and SOC 2 audits are different in several ways.

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).

The audits themselves are also performed by different types of people. To be certified as ISO 27001-compliance, the audit must be done by someone accredited by an approved ISO certification body. Meanwhile, only a certified public accountant can only complete a SOC 2 attestation report.

Additionally, there is a slight change in the appearance of certification. The ISO 27001 audit results in an organization’s certificate of conformity; the SOC 2 audit results in a formal attestation of compliance.

Should You Get ISO 27001 Certification or SOC 2?

If your business works with data, IT, or cloud services, then you should consider obtaining either an ISO 27001 or a SOC 2 certificate. Which one? That can sometimes depend on your geographic location and the location of your clients. For example, SOC 2 is more prevalent in North America, while ISO 27001 is more often recognized abroad.

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 are essentially the same, it is best to consider your customers’ expectations and expenses over time. Then choose which one is the most appropriate for you.

How Often are SOC 2 and ISO 27001 Certifications Renewed?

SOC 2 and ISO 27001 certifications are renewed at different intervals:

Can an Organization be Both SOC 2 and ISO 27001 Compliant?

Yes, an organization can be both SOC 2 and ISO 27001 compliant. Many organizations pursue both standards to demonstrate their commitment to robust security practices and processing integrity, which can help build trust with stakeholders and clients.

While both standards aim to enhance an organization’s security and data privacy, the main difference lies in their scope and approach. SOC 2 focuses on the systems and controls of a service organization, often targeting specific areas such as cloud services, SaaS providers, or data centers. In contrast, ISO 27001 is a comprehensive standard that any organization can use, regardless of size or industry.

Compliance with both standards can benefit organizations operating in regulated industries, such as healthcare (HIPAA) or those handling personal data (GDPR for companies operating in Europe). It demonstrates a strong commitment to security practices, data privacy, and business continuity, which can provide a competitive edge and instill confidence in clients and partners.

Automate ISO 27001 and SOC 2 Compliance with ZenGRC

Managing ISO and SOC compliance can be overwhelming when tracking all requirements on spreadsheets.

RiskOptics ZenGRC is a compliance and audit management solution that delivers a faster and easier path to compliance. It’s a turnkey solution pre-loaded with various compliance and security framework requirements, 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, so that your audit evidence is quickly available for the following 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 ZenGRC can help you achieve and maintain compliance.