SOC 1 vs. SOC 2: The Difference and Why Security Only Matters for One

If you are a SaaS founder or an MSP, you have likely been asked for a "SOC report." The confusion starts when you have to figure out which one.

The difference is simple. SOC 1 is about money. SOC 2 is about data.

SOC1 Explained

SOC 1 audits your internal controls over financial reporting (ICFR). It is designed for companies that process financial transactions for their clients, like payroll processors or payment gateways. The auditor wants to know if your numbers are right.

SOC 2 audits your controls over data protection. It is designed for technology companies, cloud providers, and SaaS platforms holding sensitive customer data. The auditor wants to know if that data is safe.

Why Cybersecurity Is Only Involved in SOC 2

This is where the confusion usually clears up. You generally do not need a penetration test for a SOC 1 audit because a hacker cannot "hack" a financial accounting process in the way a pentest simulates.

SOC 2 is different. It is built on the Trust Services Criteria, and the very first criteria is Security.

To pass a SOC 2 audit, you must prove that your system is protected against unauthorized access. This forces cybersecurity into the conversation. You have to demonstrate logical access controls, intrusion detection, and vulnerability management. Most importantly, a robust SOC 2 audit almost always requires a manual penetration test to validate that your external defenses and web applications are actually secure.

Do I Need SOC1 or SOC2?

If your client is a CFO asking if your software will mess up their balance sheet, you might need a SOC 1.

But if your client is a CTO or vCISO asking if you are going to leak their customer database to the dark web, you need a SOC 2. And if you need a SOC 2, you need a pentest. That is where we come in. We handle the technical scope so you can pass the audit without the headache.

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