Imagine you’ve been asked to renovate two kitchens. At the end, each of your two customers want to have a fully functioning room so you roll up your sleeves.
In getting started, you look at one and see that it’s already got a stove, fridge, and microwave installed and the client has provided their choice for countertops so all that’s less to worry about. You’ll just need to put in those counters and redo the sink to make it ready to cook in for them.
Then you look at the other project and see that it’s been completed gutted. Not only that, but the choice of all the necessary elements has been left to you. That means to make this one functional, you’ll need to hit Lowe’s first to choose all the necessary appliances, countertops, and whatnot before then actually doing the work to install them. It’s going to take more preparation and more time.
But at the end of each, you’ve got two workable kitchens that satisfy both your customers and the necessary inspectors—it’s just the road you had to take to get there was bit different given the time spent and things you had to address.
The situation is similar when comparing SOC 2 and ISO 27001 as compliance initiatives.
Just like either direction in the kitchen, both of these widely accepted, rigorous information security standards can serve you well.
For a variety of reasons, it may be more suitable for you to go with a SOC 2 report–tweaking a few kitchen elements, if you will. Or you may be in a position where you’re dealing with a kitchen that may need more time and work, a.k.a. committing to an ISO 27001 certification.
The point is, both standards allow you to demonstrate your risk management—they just do it in different reporting forms. (E.g., you’ll have a kitchen afterwards, it just depends on how you want to construct it.)
And while we can’t help you with settling on a kitchen design, we can help you understand the specific differences between SOC 2 and ISO 27001 so that what can be a daunting internal decision becomes much easier.
As providers of both types of services, we’ve worked with numerous clients who went one way, the other, or even completed both. All that experience has provided us great understanding of all the factors that can play into this decision, and we’d like to break down what we can to simplify your own decision.
In this article, we’ll deconstruct what SOC and ISO 27001 each are, their benefits, how they can complement each other, as well as what it takes to achieve both. If you’ve been waffling between which direction to choose, you’ll have a better sense on what’s best for you after having read this.
Full disclosure–at the heart of it, these two very separate compliance initiatives share a common goal and aren’t entirely worlds apart. So let’s get their shared characteristics out of the way first. A SOC 2 examination and an ISO 27001 certification have the following similarities:
- Both provide the independent assessment you need. They both will evaluate your controls that you designed and implemented to meet a specific set of requirements or criteria.
- Both are internationally recognized standards and are accepted worldwide, so you’ll be set with either one if you’re a firm with global presence or customer base–and even if you’re not.
- Both can allow you to gain a significant advantage over competitors. Because both SOC 2 and ISO 27001 are so widely accepted, they each represent a valuable way to instill trust both within your current clients and any prospects you may be trying to entice.
- Both focus on how your organization addresses information security and your approach to mitigating that risk, which’ll help provide transparency and build trust with your customers.
As far as that last point, yes–both SOC 2 and ISO 27001 evaluate your information security posture. But where they deviate is in how they approach their evaluation.
- A Certification vs. an Examination: The language distinction is particularly important here.
- An ISO 27001 certification demonstrates your conformance to the standard set of requirements. What that means is, when you choose to be evaluated against ISO 27001, you must build or facilitate a set of controls within your organization that is collectively referred to as your Information Security Management System (ISMS). To succeed in achieving certification, your ISMS will need to satisfy all the requirements of clauses 4-10 and the controls mandated by ISO 27001 (Annex A). It’s an extensive set.
- However, a SOC 2 examination will detail your controls that achieve your principal service commitments and system requirements as it relates to the applicable and chosen Trust Services Criteria (TSCs). These TSCs represent a standard set of criteria, and you’ll tailor your examination to those (of which there are five total) that apply to your principal service commitments and system requirements. This provides a certain amount of flexibility that ISO 27001 does not have. SOC 2 recognizes that your information security controls may be different from another organization, but that difference won’t matter as long as you each satisfy your individual commitments and requirements within SOC 2.
- SOC examinations are performed under AICPA attestation standards and are not considered certifications. SOC examinations result in the issuance of an attestation report by the independent CPA firm that assessed you. With ISO 27001, a Certification Body must certify you and they will issue you your certificate. (Not every CPA is a Certification Body and vice versa, so you would need to ensure your auditor has the right credentials to perform whichever you choose.)
- Deliverables: Upon completion of these compliance initiatives, you will receive deliverables that will look a bit different.
- First of all, the main deliverable for an ISO 27001 certification is the certificate. It’ll contain information like your ISMS scope (including relevant organizational functions and locations), the relevant dates of the certification, and the name of the certifying body. With that being said, you’ll see more than just that throughout your process–your service auditor will issue you a report at the end of each point in the process, including at the end of stage 1 and stage 2, and again after a surveillance audits or a recertification reviews. However, these reports are generally for internal-use only and are not intended to be distributed externally.
- On the other hand, undergoing a SOC 2 will yield a report that includes the CPA’s opinion on whether you are doing the things you said you’re doing in the included attestation letter, a system description, and details of controls within your environment. This detailed report includes information about your company background, services provided, principal service commitments, and system requirements, as well as relevant infrastructure, procedures, people, data, and applications within the scope. The SOC 2 report is meant to be consumed in its entirety by your customers and interested parties, who are permitted read the report.
- Certification/Reporting Cadence:
- An ISO 27001 certification is structured around three-year cycle that includes an initial certification (that occurs when the organization becomes certified), and then at least two annual surveillance reviews thereafter. Once the initial three-year cycle is complete, a recertification takes place, once again followed by the two annual surveillance reviews.
- With SOC 2, organizations can be assessed as of a point in time (Type 1) or over a period of time (Type 2). There really are no requirements as to the period of time that should be covered by a SOC 2, however, the typical, industry-accepted reporting period for SOC 2 is 12 months (recurring annually).
- NOTE: If you’re thinking that you might want to get started more quickly, know that, in our experience, ISO 27001 generally necessitates a longer ramp-up period in comparison with SOC 2.
SOC 2 or ISO 27001: Which Best for You?
Given both of their merits, you’re probably asking yourself how to decide which one to tackle. To help with that, here are some questions to ask yourself:
- What are your customers requesting? If they’re not saying much, consider gauging their preference through a questionnaire.
- What is your compliance goal right now? Do you need to primarily ensure that information security is continually identified, evaluated, addressed and monitored through the use of an ISMS, or do you need a vehicle to provide customers with a full view of your system description and supporting controls?
- What is your competition doing? Do some research within your market and determine which direction they went–examination or certification.
- How much time do you have? It’s like we said with the kitchens—there is a difference in preparation between your options. Compared to SOC 2, ISO is a heavy policy and procedure documentation audit, and that’ll take time to get ready. So, ask yourself:
- Do you have personnel/resources internally to prepare your ISMS right now?
- If not, do you have the budget to bring in someone to help you with that preparation?
At the end of the day, there are benefits to both a SOC 2 examination and an ISO 27001 certification–each represents a great way you can communicate your commitment to information security.
Is one better than the other? We don’t think so, nor do we think that perspective is practical. When deciding whether to undergo SOC 2 and ISO 27001, your market, your customers, and any regulatory requirements you are bound to should decide your course. No matter what, you’ll have a new compliance advantage at the end of both processes.
And if you’re really thinking about going for it, pairing the two together can also lead to several benefits– not only from a competitive edge standpoint, but also when considering efficiency among audits, as there are several commonalities between the subject areas of both SOC 2 and ISO 27001.
If you’re still unsure about which direction to take, we are happy to speak with you and provide more context for both services regarding your specific environments and answer any lingering questions you may have regarding your possible IT compliance stack.
About the AuthorMore Content by Jordan Hicks