SOC 1 vs SOC 2
The differences, where they overlap, and which you actually need.
The short answer
SOC 1 reports on controls that affect your customers’ financial reporting (ICFR); SOC 2 reports on controls for security, availability, confidentiality, processing integrity and privacy. If your software touches customers’ financial data or transactions, you likely need SOC 1; if buyers care about how you protect their data, you need SOC 2. Many fintech and payroll platforms need both. CATAAM scopes and automates SOC 1 and SOC 2 from a shared control library.
SOC 1 vs SOC 2, side by side
| SOC 1 | SOC 2 | |
|---|---|---|
| What it covers | Internal Control over Financial Reporting (ICFR) — controls relevant to your customers’ financial statements | Security and data-protection controls (the 5 Trust Services Criteria) |
| Who asks for it | Your customers’ auditors and finance teams | Your customers’ security, procurement and vendor-risk teams |
| Standard | SSAE 18 (AT-C 320) | SSAE 18 (AT-C 205), AICPA Trust Services Criteria |
| Report types | Type I (design) and Type II (operating effectiveness) | Type I (design) and Type II (operating effectiveness) |
| Typical users | Payroll, payments, billing, financial-data processors | SaaS, cloud, and data platforms of all kinds |
| Audience | Restricted — user entities and their auditors | Restricted — customers and prospects under NDA |
| Best for | Software whose processing flows into a customer’s books | Software that stores or processes customer data |
Choose SOC 1 when…
- ✓Your platform processes payroll, payments, or billing
- ✓A customer’s financial auditor requested a SOC 1
- ✓Your output feeds directly into customers’ financial statements
Choose SOC 2 when…
- ✓Buyers ask about how you secure their data
- ✓You store or process customer data of any kind
- ✓You need a general-purpose security proof for procurement
Do you need both?
SOC 1 and SOC 2 share the same audit machinery (SSAE 18, Type I/II, a CPA firm) and much of the same control evidence around access, change management and monitoring. CATAAM scopes both from one control set, so fintech and payroll platforms that need both aren’t running two disconnected programs.
SOC 1 vs SOC 2 FAQ
- What is the difference between SOC 1 and SOC 2?
- SOC 1 covers controls relevant to your customers’ financial reporting; SOC 2 covers security and data-protection controls. SOC 1 answers "could your service distort our books?"; SOC 2 answers "can we trust you with our data?".
- Do I need SOC 1 or SOC 2?
- If your software affects customers’ financial statements (payroll, payments, billing), you likely need SOC 1. If buyers care about data security, you need SOC 2. Fintech platforms often need both.
- Can one audit cover SOC 1 and SOC 2?
- They are separate reports, but they share the SSAE 18 framework and much of the same control evidence, so they are commonly run together to save cost.
- Is SOC 2 more common than SOC 1?
- Yes. SOC 2 is the default request from software buyers. SOC 1 is specific to services that touch financial reporting.
One platform for SOC 1 and SOC 2
Map evidence once, satisfy both — plus built-in breach & attack simulation to prove your controls actually work. From $149/mo.