Data security is becoming more front and center for businesses. With major security breaches showing up in the headlines, companies paying attention are well served to begin building out an infosec program. Especially if they neglected to build one out on the front end of their business. One question worth asking for companies ready to take this next step is: SOC 2 or ISO 27001 certification? Which certification provides the security that businesses need while building confidence with vendors and customers?
First, what is SOC 2? SOC 2 is administered by the American Institute of Certified Public Accountants (AICPA). This framework analyzes if a business’ current security practices are effective in protecting data. If not, the company can make modifications in order to become SOC 2-compliant.
Having a specific security framework and controls in place isn’t necessary to request a SOC 2 compliance audit. But passing the audit is necessary to earn SOC 2 compliance.
When conducting a SOC 2 audit, the external auditors measure effectiveness against these five trust service categories:
Unlike ISO 27001, which uses universal benchmarks for every industry and geographic location, SOC 2 audits can be more customizable to a specific business.
The best practices for airline security software might be different than banking security as a quick example.
The primary purpose of the SOC II audit is to determine the effectiveness of a company’s data security practices.
An audit can test a specific task or a series of processes. SOC 2 compliance applies to the organization’s data system which may or may not be ISO-compliant.
Also, SOC 2 is mostly recognized within North America and among technology services. The downside is that SOC 2 compliance may not be as valuable for international organizations outside of the United States.
Due to its universal standards, ISO 27001 carries more validity with international organizations in most industry sectors.
Potential vendors may require ISO 27001 due to its universality but not recognize SOC 2 compliance even though the data can be secure.
An organization will need to hire a third-party Certified Public Accountant (CPA) or Chartered Accountant (CA) firm to conduct a SOC II compliance audit.
The external audit team audits a company’s information security system using the five trust service categories.
The first audit is a type 1 audit that serves as a snapshot of the current security practices and provides an extensive review. The audit team can recommend improvements using this initial audit.
Follow-up audits are type 2 audits measuring the progress since performing the type 1 audit.
ISO 27001 certification can be more difficult to achieve than SOC 2 because the standard applies to the entire company’s information security framework.
For example, ISO 27001 certification entails 114 controls and 10 management system clauses. SOC II measures a system against only 5 trust service categories.
Despite having fewer benchmarks, the SOC 2 compliance process is extensive and measures how a company manages and protects internal data.
ISO 27001 requires companies to establish an Information Security Management System (ISMS). This system gathers the various data security practices a company uses to protect and manage data.
The ANSI National Accreditation Board (ANAB) oversees the ISO 27001 certification process for American-based businesses.
Other governing bodies provide accreditation services in different countries but all businesses must adhere to the same worldwide standards.
Since ISO 27001 is a universal standard, it can be a better option for international clients wanting peace of mind that their business partners practice the same best practices for their Information Security Management System (ISMS).
An Accredited Registrar will conduct the ISO 27001 audit. In the United States, the independent auditor will likely be affiliated with the ANSI National Accreditation Board.
The external audit has three stages:
-Stage 1: Informal review of the current ISMS for the existing documentation
-Stage 2: Formal audit to issue ISO 27001 certification
-Stage 3: Follow-up audit to confirm the organization remains in compliance
Successfully completing the first two stages earns ISO 27001:2013 compliance.
The stage 1 informal review lets auditors recommend improvements to bring current policies into compliance.
Fully preparing for the ISO 27001 audit can include generating these information security documents:
-Information security policy
-Statement of Applicability
-Risk Treatment Plan
If any necessary controls are missing, this initial audit will find the non-compliant areas.
The stage 2 formal audit is when auditors request evidence to evaluate the design and effectiveness of the Information Security Management System.
While SOC 2 and ISO 27001 have their unique purposes, they share many common traits. Both certifications:
-Evaluate current data security practices
-Design more effective data security systems
-Can build trust with vendors and regulatory agencies
-Are optional and not government-mandated
Both compliance frameworks can improve current data security practices and build public trust. The better option depends on the business needs and industry.
SOC 2 compliance can be better than ISO 27001 certification in these instances:
-Already have an Information Security Management System
-Desire to test current data security framework for effectiveness
-Want a less rigorous compliance audit
-Primarily conduct business in North America
-Are a technology service (i.e., SaaS)
Although SOC 2 has a less rigorous audit process than ISO 27001, the audits can effectively evaluate current security practices and find weak points.
ISO 27001 can be the better compliance framework for these situations:
-Need to create an Information Security Management System
-Want to adopt worldwide data security standards
-Desire more extensive audit process
-Have international clients
Pursuing ISO 27001 certification requires more effort but “going the extra mile” can impress existing customers and potential vendors.
The ISO standard is universally recognized across every industry. A business in the United States can expect an organization in Germany to adhere to the same standards.
After establishing a strong policy, the company may follow-up with a SOC 2 audit for an in-depth look at system effectiveness.
SOC 2 or ISO 27001 certification gives customers confidence their data is secure with third-party companies. But ISO 27001 can be the better option for most businesses as this framework is more widely accepted and the compliance process is more rigorous.