ISO® 27001 vs. SOC 2: Navigating the Complex Landscape of Data Security Frameworks

ISO® 27001 and SOC 2 are two vital frameworks for securing and ensuring the compliance of modern businesses—but understanding the differences, use cases, and similarities is crucial for successful implementation.

In this guide, ISMS Connect aims to help organizations make informed decisions about their security strategies by highlighting the differences between ISO® 27001 and SOC 2. Examining their similarities and differences will empower you to adopt the best approach for your organization's specific needs.

Let’s dive in.

What Is ISO® 27001?

The ISO® 27001 standard is globally recognized for its ability to manage and safeguard sensitive information using a risk management approach. This standard outlines the requirements that an ISMS must meet and provides guidance for companies of any size and from all sectors of activity. 

Businesses can systematically manage their sensitive information, including people, processes, and IT systems, by establishing, implementing, maintaining, and continually improving an information security management system (ISMS).

What Is SOC 2?

SOC 2 is a security framework developed by the American Institute of Certified Public Accountants (AICPA) in 2010. Its primary aim is to assist organizations in ensuring the safety of customer data from vulnerabilities and unauthorized access.

Compliance involves implementing policies aligned with five Trust Services Criteria (TSC): 

• Security

• Availability

• Processing Integrity

• Confidentiality

• Privacy

For instance, SOC 2 is valuable for safeguarding data in cloud-based applications like Software as a Service (SaaS).

There exist two SOC 2 report types: SOC 2 Type I, assessing controls at a specific time, and SOC 2 Type II, examining control functionality over a period (usually 3 to 12 months). The former gauges the presence of security controls, while the latter evaluates their effectiveness over time.

How Can ISO® 27001 and SOC 2 Benefit You?

ISO® 27001

Improve structure and focus

ISO® 27001 aims to assist organizations in determining the necessary security measures to be implemented, allowing them to prioritize enhancing their overall performance rather than solely focusing on security. This standard helps refine an organization’s structure and concentration, enabling it to deliver value to customers effectively.

Protect your reputation from security threats

One of the most compelling reasons to seek ISO® 27001 certification is safeguarding your organization against various security threats. These threats encompass the ever-looming danger of cyber criminals attempting to breach your organization’s defenses and the potential risks posed by internal actors making careless mistakes that could lead to data breaches.

By adhering to ISO® 27001’s framework, you can ensure the implementation of robust tools and measures across the three fundamental pillars of cyber security: 

• People: Establishing a culture of security awareness and training employees on best practices to minimize human error and prevent security incidents. 

• Processes: Developing and implementing well-defined policies and procedures that govern how sensitive information is handled, stored, and accessed. 

• Technology: Implementing appropriate technical controls such as firewalls, encryption, and access controls to protect their digital assets.

Comply with business, legal, contractual, and regulatory requirements

ISO 27001 aims to ensure that appropriate and proportional security measures are implemented to safeguard information. These measures are essential in complying with the evermore stringent regulatory standards, such as the General Data Protection Regulation (GDPR) and the Network and Information Systems (NIS) Regulations.

For instance, under GDPR, organizations must implement measures to protect personal data, including encryption, access controls, and regular security assessments. ISO® 27001 provides a systematic approach to identify and implement these security controls, ensuring compliance with GDPR.

SOC 2

Robust Security Assurance 

The SOC 2 Type 2 audit is not just another checkbox exercise—it's an in-depth process that delves deep into your organization's security controls. 

Unlike other SOC Type reports (like SOC 1 and SOC 3), a Type 2 audit involves extensive evaluations conducted by an auditing body. This evaluation assesses the design and maintenance of your security controls over an extended period (often 12 months). This extended testing period ensures your security measures meet real-world challenges and threats.

The weight of a SOC 2 Type 2 audit stems from its ability to offer insights that surpass other audit types. This level of scrutiny can be particularly beneficial for organizations that handle sensitive client data, operate in regulated industries, or simply want to elevate their security practices to the highest standard.

Gateway to Holistic Compliance

Achieving SOC 2 compliance has benefits beyond security. It can pave the way for ISO® 27001 certification as the requirements are similar. A successful SOC 2 audit establishes a strong foundation for ISO® 27001 compliance.

Imagine a potential client requesting ISO® 27001 certification from two vendors. One vendor is starting from scratch, needing to extensively build and document their ISMS. On the other hand, the second vendor, having already achieved SOC 2 compliance, possesses an in-depth understanding of their controls and security measures. This existing knowledge and validated foundation give them a head start in transitioning toward ISO® 27001 certification, saving time, effort, and resources.

Cost-Effectiveness

The financial implications of inadequate security measures can be staggering. On average, a single data breach in 2023 cost a staggering $4.45 million—this figure continues to increase each year. Implementing and maintaining a strong security posture is not just a good business practice; it's a financial imperative.

A SOC 2 audit is a proactive step toward preventing costly security breaches. By identifying vulnerabilities, evaluating controls, and implementing necessary improvements, companies can significantly reduce the risk of breaches and the associated financial fallout. The cost of a SOC 2 audit, when compared to the potential financial devastation of a breach, becomes a wise and strategic investment in protecting both your business and your reputation.

Similarities Between SOC 2 and ISO® 27001

According to Schellman, SOC 2 and ISO® 27001 have the following similarities:

• Both provide independent assurance on the service organization’s controls designed and implemented to meet specific requirements or criteria.

• Both are internationally recognized standards and are accepted worldwide.

• Both allow a service organization to gain a significant advantage over competitors.

The ISO® 27001 certification includes deliverables outlining the organization’s conformance to the standard requirements. The SOC 2 attestation report outlines the controls that meet the applicable Trust Services Criteria.

ISO® 27001 vs. SOC 2: Key Differences

#1: Scope

While these frameworks cover many similar topics, they look at a few different security controls. 

• ISO® 27001: Focuses on developing and maintaining an ISMS, the overarching system for managing data protection within an organization. 

• SOC 2: Focuses on showing that your organization has implemented the required data security controls.

#2: Locations for use 

SOC 2 is focused on the United States, whereas ISO® 27001 holds international relevance.

#3: Certification process

SOC 2

• Assessment Authority: The assessment for SOC 2 certification is typically carried out by a licensed Certified Public Accountant (CPA) firm.

• Scope: The assessment focuses on evaluating an organization's controls related to security, availability, processing integrity, confidentiality, and privacy based on the Trust Services Criteria (TSC).

• Attestation: The CPA firm attests to the organization's adherence to the TSC, assuring the effectiveness of controls in place.

• Report Types: There are two main types of SOC 2 reports: Type I, which assesses controls at a point in time, and Type II, which evaluates control effectiveness over a specified period.

ISO® 27001

• Assessment Authority: The assessment for ISO® 27001 certification is conducted by an independent ISO® certification body.

• Scope: The assessment covers the entire Information Security Management System (ISMS) of the organization, including processes, policies, people, and technology.

• Certification: Upon successful assessment, the ISO® certification body issues an ISO® 27001 certificate, indicating that the organization's ISMS meets the specified standards.

• Ongoing Compliance: ISO® 27001 certification requires regular audits to ensure ongoing compliance and continual improvement of the ISMS.

SOC 2 is intended to prove the security level of systems against static principles and criteria, while ISO® 27001 – to define, implement, operate, control, and improve overall security.

#4: Timelines for Readiness and Renewal Period

ISO® 27001 certification is an independent validation that an ISMS conforms to the requirements of the ISO® 27001 standard. ISO® 27001 certificates are valid for three years, during which surveillance audits must be completed.

A SOC 2 report is produced during an audit performed by an independent CPA or accountancy organization. 

• Type 1 reports cover the description of the services’ systems and show if the proposed controls support the organization's objectives. 

• Type 2 reports also cover the description of the services’ systems and show if the proposed controls support the objectives the organization wants to achieve, as well as whether these controls operate as expected over a period of time (generally between 6 and 12 months).

SOC 2 certification remains in effect for a period of 12 months, commencing from the initial issuance of the report.

SOC 2 vs. ISO® 27001: Which One Should You Choose?

The choice between these frameworks depends on the level of security assurance you’re after, the market(s) you operate in, and the operational commitment you're prepared to make.

Below you’ll find some guidance on choosing between these two frameworks:

• ISO® 27001: This framework is ideal for organizations that want to integrate information security into their core operations and promote a culture of continuous improvement and risk management.

• SOC 2: This framework is designed to validate the implementation of specific security controls, making it a valuable option for organizations that handle sensitive customer data and want to assure clients of their security measures. It is especially relevant for establishing trust and credibility within an industry.

As a small to medium-sized business (SMB), embarking on the journey towards certification might feel overwhelming. That's where ISMS Connect steps in—we simplify complex information security management concepts for SMBs.

At ISMS Connect, we've created a dynamic community that serves as a comprehensive knowledge center. Here, you can access a wealth of templates, guides, and expert advice from seasoned consultants. Our focus is empowering you to take charge of your certification journey, ensuring you're well-prepared to achieve your desired security standard—whether it's SOC 2, ISO® 27001, or other relevant certifications.

Conclusion

When it comes to service organizations, it is crucial to prioritize privacy, security, availability, processing integrity, and confidentiality. By implementing frameworks that enhance security strategies and resilience against cyber threats, industry trust can be established. The decision to choose between ISO® 27001 and SOC 2 will depend on the desired level of security assurance and operational commitment.

For SMBs seeking certification, ISMS Connect offers a simplified approach through our resource hub and community. We support SMBs in navigating the complex world of information security management, whether pursuing SOC 2, ISO® 27001, or other certifications. Collaborating with ISMS Connect promises a confident journey toward certification, contributing to a safer business landscape. 

Send us a message to learn more.